30 JUNE 2021
ANNUAL
FINANCIAL
REPORT
Cokal Limited ACN 082 541 437
Annual Financial Report for the year ended 30 June 2021
Contents
Corporate Information
Chairman’s Letter to Shareholders
Review of Operations
Directors’ report
Auditor’s Independence Declaration to the Directors of Cokal Limited
Consolidated Statement of Comprehensive Income for the year ended 30 June 2021
Consolidated Statement of Financial Position as at 30 June 2021
Consolidated Statement of Changes in Equity for the year ended 30 June 2021
Consolidated Statement of Cash Flows for the year ended 30 June 2021
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
Declaration by Directors
Independent Auditor’s Report
Shareholder Information
Interests in Tenements and Projects
1
2
3
14
25
26
27
28
29
30
63
64
69
72
Corporate Information
DIRECTORS
Domenic Martino
Karan Bangur
David (Allen) Delbridge
COMPANY SECRETARIES
Louisa Martino
Miranda Yuan
REGISTERED OFFICE AND PRINCIPAL
BUSINESS OFFICE
Level 5
56 Pitt Street
Sydney NSW 2000
Phone: + 61 2 8823 3177
COUNTRY OF INCORPORATION
Australia
SOLICITORS
Mills Oakley
Level 7,
151 Clarence Street
Sydney NSW 2000
Phone: + 61 2 8289 5800
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Phone: +61 8 9389 8033
Fax: +61 8 9262 3723
AUDITORS
Hall Chadwick
Level 40, 2 Park Street
Sydney NSW 2000
STOCK EXCHANGE LISTING
Australian Securities Exchange Ltd
ASX Code: CKA
INTERNET ADDRESS
www.cokal.com.au
AUSTRALIAN BUSINESS NUMBER
ABN 55 082 541 437
Compliance Statement
This Annual Report contains information relating to a mineral resource and reserve extracted from ASX market
announcements dated 29 January 2015, 29 April 2016, 1 August 2017, 29 December 2020 and 28 September 2021, reported
in accordance with the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves” (2012 JORC Code) and available for viewing at www.cokal.com. CKA confirms that it is not aware of any new
information or data that materially affects the information included in any original ASX market announcement. The Company
is not aware of any new information or data that materially affects the information included in the relevant market
announcement and, in the case of estimates of mineral resources, that all material assumptions and technical parameters
underpinning the estimate in the relevant market announcement continue to apply and have not materially changed.
COKAL LIMITED Annual Report 2021 | Page 1
Chairman’s Letter to Shareholders
Dear Shareholders,
These are exciting times for Cokal with the Group having recently secured funding for the near-term development of
BBM – the Company’s flagship, high quality metallurgical coal project. This last financial year has seen the development
of preparations for the commencement of coal production at BBM. Predominantly the Group has focussed on managing
mining tenders which are in the final stages of negotiation.
Achievements include:
•
•
Identification of a 98km former logging road to bypass 190km of Barito River. Access road reconstruction is to
commence shortly;
Finalisation of a Coal Evacuation Strategy for BBM;
• Determination of the location of the Intermediate Stockpile (ISP) and barge loader which will be at Bumban (Batu
Tuhup);
•
5 Year Mining Plan updated to reflect earlier mining of coking coal; and
• Negotiations and finalisation of contract with HSM Marine to construct and operate shallow draft self-propelled
barges.
Post year end, the Group has called for tenders for resource delineation drilling at its Tambang Benua Alam Raya (TBAR)
lease area in the Puruk Cahu Regency of Central Kalimantan. Due to the proximity of TBAR, next door to BBM and its
prospectivity evidenced in earlier exploration, the possible delineation of a commercial resource at TBAR will increase
the opportunity for early expansion of production well beyond the production profile that Cokal has planned for BBM.
Future development of TBAR will be supported by the existing BBM infrastructure saving costs which will also assist in
fast tracking its development. During the year the TBAR IUP for exploration licence was extended, and the Group is
focussed on the development of the TBAR resource as a priority for this current financial year.
I would like to thank my fellow Board members and management as well as our in-country teams for their ongoing
efforts and positive outcomes during the past year.
We thank you for your on going support.
Domenic Martino
Chairman
COKAL LIMITED Annual Report 2021 | Page 2
Review of Operations
Cokal Limited (ASX:CKA; Cokal or the Company) is an Australian listed company with the objective of becoming a
metallurgical coal producer with a global presence. Cokal has interests in four projects in Central Kalimantan, Indonesia,
each with known resources of metallurgical coal.
HIGHLIGHTS
Highlights for the year include:
•
•
Coal Logistics Strategy revised for BBM
98km ex logging road to bypass the most difficult 190km of Barito River
• Bumban / Batu Tuhup site selected for ISP and barge loading
• Downriver ISP site selected at Buntok
• Mining contract signed
•
Fuel and explosives contracts agreed
•
Equipment mobilised to repair the access road to BBM
• Road repair progressing well
•
Coal haulage contract close to final
•
•
•
•
Platts provided an assessment of BBM coal value in use
Cokal received US$2.0M for the appointment of PT Sumber Global Energy (SGE) as Exclusive Sales Agent for
0.6Mt domestic coal sales from BBM
$20 million BBM funding in place
International Coal Marketing Agreement entered into to enable BBM to market its coal to the international
market and assist BBM in financing its coal stockpile at the river jetty
INDONESIAN COAL ASSETS
Cokal holds shares in the following Indonesian coal assets in Central Kalimantan, each with known resources of
metallurgical coal:
•
•
•
•
60% of the Bumi Barito Mineral (BBM) project located in Central Province, Kalimantan, Indonesia. The BBM
tenement area is 14,980ha;
75% of PT Tambang Benua Alam Raya (TBAR) which owns an exploration tenement covering an area of
approximately 18,850ha in Central Province, Kalimantan, Indonesia. This tenement is located adjacent to and
southeast of the BBM project;
60% of the Borneo Bara Prima (BBP) project located in Central Province, Kalimantan, Indonesia. The BBP
tenement area is approximately 13,050ha;
75% of the Anugerah Alam Katingan (AAK) project. This project is also located in Central Province, Kalimantan,
Indonesia and has an area of approximately 5,000ha. AAK is currently on ‘on-hold’ status by Provincial Police
Department (Polda Kalteng). The Police have investigated a dispute over the ownership of AAK pre-dating
Cokal’s interest in the Project. Cokal is an aggrieved party and will await the outcome of the Police investigation.
COKAL LIMITED Annual Report 2020 | Page 3
Review of Operations
BBM, TBAR, BBP and AAK are located adjacent to Indomet’s extensive coking coal tenements. The Company is currently
focussed on the development of the BBM Project and delineation of Resources in TBAR.
Bumi Barito Mineral (BBM) Project
Indonesian Coal Assets
BBM’s permit covers an area of 14,980ha with multiple seams of high quality metallurgical coal. BBM has regulatory
approvals in place including:
• Mining Licence for 20 years with two further extensions of 10 years each
•
•
•
Environmental approval for a mining rate of 6Mt per annum
Port construction approval
Forestry Permit to commence mining activity
• RKAB approval of annual plan.
The BBM Permit Area is bisected by the Barito River which cuts through the tenement in a north-south trend. Almost
the entire IUP contains coal-bearing sediments with open cut mineable areas controlled by the Barito River and three
major fault systems. Only the East side of the river within the BBM permit area (East Block) has been drilled so far and
contains 261.5Mt Resources and 18.9Mt Reserves (Revised June 2020). Coal analyses from more than 130 mapped
outcrops on the west side of the Barito River (West Block) indicate it also contains premium quality anthracite and PCI
coals. This coal does not currently form part of stated BBM coal Resources and provides potential for significant future
expansion of BBM Resources.
COKAL LIMITED Annual Report 2021 | Page 4
Review of Operations
BBM Project Area
BBM will be the first deposit developed by Cokal. In the East Block mine planning for Pits 1, 2, 3 and 4 has been
completed as the basis for a five year mining contract. During survey of mining areas in Pit 3 a disused logging road was
identified. This runs 98km to Bumban to bypass 190km of the most difficult parts of the Upper Barito River.
No exploration activity or mining production was conducted by Cokal during the year. Current mine development is
discussed later in this report.
Tambang Benua Alam Raya (TBAR) Tenement
TBAR’s exploration authority covers an area of 18,850ha immediately adjacent to and south of Cokal's BBM tenement.
Outcrop mapping of four seams over 17km strike length indicates a substantial resource of high grade coking coal in this
deposit. It is believed these seams correlate to the B, C, D and J seams in BBM.
Extension of the IUP for exploration was received in February 2020. At Cokal’s request the commitment by Cokal to
assess and develop TBAR was deferred by a year while BBM is being developed.
Over 80% of the TBAR tenement area is available for exploration and mine development, with 20% protected forest.
An exploration plan has been prepared to delineate TBAR Resources and Reserves under the JORC code. This will enable
submission of an application for a Production and Operation IUP within two years, now planned for late 2022 The
Production and Operation IUP will be equivalent to a mining licence.
No exploration activity or mining production was conducted at TBAR by Cokal during the year. However the access road
from BBM Pit 3 to Bumban passes through the TBAR licence area and in surveying this road several coal outcrops were
exposed which are thought to be the TBAR coking coal seams including J seam.
The road being repaired for BBM will be used by TBAR for access during delineation drilling and to haul coal after the
mine is developed.
COKAL LIMITED Annual Report 2021 | Page 5
Review of Operations
Borneo Bara Prima (BBP) Tenement
Cokal's BBP project covers 13,050ha in Murung Raya Regency, Central Kalimantan. BBP has been granted an Exploration
Forestry Permit (IPPKH) and has been confirmed on the Central Government’s Clean and Clear list. The IUP was
transferred to the Central Government where it now awaits approval to be upgraded to a mining licence (Production
and Operation IUP).
A business licence decree for operation foreign mining production (IUP OP PMA) from the Capital Investment
Coordination Board Centre (BKPM) was received in Q1 2019. Work plans and the budget (RKAB) 2019 have been
submitted to the government (Directorate General Minerals and Coal).
No exploration activity was conducted in BBP during the year.
Anugerah Alam Katingan (AAK) Tenement
Cokal's AAK project covers 5,000ha in Central Kalimantan. Applications for the Exploration Forestry Permit (IPPKH) and
Clean and Clear Certificates continue to be processed. Cokal continues to monitor the progress of the regulatory
upgrade approvals for AAK.
No exploration activity was conducted in AAK during the year.
BBM DEVELOPMENT
BBM Mine Logistics Strategy
BBM Mine Logistics
It was considered a risk to rely on a consistent water depth in the Upper Barito River as it may delay barging operations
of product coal in the dry season. To minimise this operational risk it was decided to evacuate coal via a 98km all-
weather road from BBM Pit 3 to an Intermediate Stockpile (ISP) and barge loader at Bumban (Batu Tuhup) where 2.5m
water depth is available all year round. This bypasses the most difficult 190km of the Upper Barito River.
COKAL LIMITED Annual Report 2021 | Page 6
Review of Operations
This is a former logging road with 52km of the 98km still in regular use to haul road and 46km needing to be repaired.
The main repair task is to replace bridges and culverts. Cokal has established its right to use these roads with exclusive
use of the first 46km of the road which is currently disused. This has been adopted as the main logistics route to bring
BBM and TBAR coal to market via a barge loader at Batu Tuhup. Road repair commenced in early 2021 and is progressing
well with almost 20km of the 46km road now trafficable.
Reconstruction of this section of the road will be in two stages: first to gain road access to Pit 3 and then to upgrade
the road to be suitable for coal haulage in 30t trucks. When road access has been achieved the mining equipment will
be brought to site and mining commenced.
A barging company, HSM Marine, will be contracted to supply and operate 3,100t shallow draft, self propelled barges
which can operate in 2.5m deep water to deliver coal from Batu Tuhup 133km to a point below Muara Teweh Bridge
from where it will be transferred on river to 8,000t river barges for the 203km voyage down river to an ISP to be
developed on shore at Buntok. From there coal will be barged 272km to Taboneo at the mouth of the Barito River to
ships standing offshore.
Batu Tuhup ISP and Jetty
The jetty site at Batu Tuhup has more than 300m river frontage. While this site is being developed BBM has secured
agreement to use an existing jetty 1.5km away for the first one to two years. The existing jetty will be used to mobilise
mining equipment. A conceptual plan has been developed for the Batu Tuhup site and surveys contracted to obtain
topographical data and bathymetric data.
Schematic of 3,100t Shallow Draft Self Propelled Barge
Barge specifications include:
•
•
•
Forward controls for optimum visibility and control
100m long
20m wide
• Deck mounted azimuth thrusters which rotate 3600 to propel and steer the barge
• Bow thruster to assist directing the bow in the preferred navigation channel
• Can operate fully loaded in 2.5m water depth.
COKAL LIMITED Annual Report 2021 | Page 7
Review of Operation
Barges will be very manoeuverable and able to rotate in little more than their own length. This will be valuable in
negotiating passage under bridges and tight bends in the navigable river channel. The communications mast can be
lowered to reduce air draft for passage under bridges when the Barito River is in flood.
Road Repair
Repair has commenced of the 98km road from Pit 3 to Batu Tuhup. The first 46km from BBM's Pit 3 will be reformed to
10m wide with 2% crossfall and 2m shoulders. Roadside drains will carry runoff water away from the road. Steep
sections of the road will be cut and filled as required to achieve a maximum 8% gradient for uphill loaded hauls, 10% on
downhill loaded sections. It is planned to haul coal in 30t trucks so relatively tight curves can still be accepted. Many
parts of the surface of the old road are still intact and not severely rutted and the road can be reformed into an all
weather road by using the existing gravel and implementing careful drainage control. Many new culverts and bridges
will be required. Cokal will have exclusive use of this section of the road.
The second 52km of the road is already in use by logging and mining companies but traffic is not heavy. Cokal will share
the upgrading and maintenance of this road with current users.
The logging company which built and previously used this road has been engaged to provide advice and facilitate social
acceptance of the road reconstruction. They will also provide the timber and technology to rebuild culverts and bridges.
Sources of gravel have been identified which can be used to maintain the road all weather capability throughout the
period of mining. An andesite deposit at the midpoint of the haul road has the potential to be a long term reliable
source of gravel.
BBM has secured an exclusive permit to use the haul road from Pit 3 to the 52km intersection with shared use from that
intersection to the jetty at Batu Tuhup.
Almost 20km of the 46km is now trafficable.
Mining Contracts
Cokal’s 60% owned subsidiary and owner of the BBM Project, PT Bumi Barito Mineral (“BBM”) awarded contracts to
PT Harmoni Panca Utama (HSM), a major mining contractor with experience in Central Kalimantan, to:
• Remove overburden and interburden at BBM Pits 1, 2, 3 and 4;
• Mine coal at the BBM Pits; and
•
Transport coal from the BBM Pits to the run of mine (ROM) facilities at Pit 3.
A separate contract is being negotiated with another company to haul coal from the Pit 3 ROM facilities to the jetty site
at Batu Tuhup.
The mining and haulage contracts will incorporate explosives supply and fuel supply contracts which are now being
finalised.
Coal Beneficiation
Seams B, C and D in Pits 1 and 2 will be mined to produce PCI coal only. This coal will be crushed to -50mm but not
beneficiated.
J Seam in Pits 3 and 4 will be mined to produce premium coking coal. Most of the ash in run-of-mine (ROM) coal in the
J seam occurs in two or three thin (50mm) mudstone bands which are much harder than the friable vitrinite which
comprises 90 to 92% of the coal. It is expected that the average 13% ROM ash can be reduced to less than 7% ash by
screening alone. Bearing in mind the BBM exploration experience of washing coal cores at 1.6sg provided 85% yield at
5 to 6% ash, this is not an unreasonable expectation.
Coal with 7% ash, combined with the high swelling index, low sulphur and ultra low phosphorus will be easily marketed
compared with most coking coals in the market.
COKAL LIMITED Annual Report 2021 | Page 8
Review of Operations
The elimination of the need for water jig washing will be a significant simplification of the preparation of coking coal
from BBM and will enable the beneficiation facility to be relocated as the mining operation advances to minimise ROM
coal haul distances.
The coal processing plant will be constructed to enable the subsequent addition of a coal washing jig should it be
determined that it will be more profitable to produce a lower (5 to 6%) ash product.
Platts Benchmarking of BBM Coal
S&P Global Platts (“Platts”) reviewed BBM coal quality during the financial year and assessed its value in the
international market. The positive aspects of BBM coal that were noted included its low ash, low volatiles, low sulfur,
high vitrinite content and ultra-low phosphorus content. Platts assessed BBM coking coal to be premium low volatile
hard coking coal (HCC) most likely used in a blend in blast furnaces and that it would be attractive in the Chinese market
where the current spot price for premium low vol HCC is above US$300/t cif. Platts assessed BBM PCI coal as premium
PCI and rated BBM PCI coal as justifying a 10% premium over top value PCI coal.
FINANCE FOR BBM DEVELOPMENT
Agreement with Sumber Global Energy (SGE)
BBM has entered into an agreement with PT Slumber Global Energy (“SGE”) to monetise near-term coal production.
SGE will advance BBM a total of US$2.0M as consideration for Cokal appointing SGE as Exclusive Sales Agent for domestic
Indonesian coal sales whereby SGE will undertake the marketing and sales of 0.6Mt BBM coal sold into the Indonesian
domestic market for a period of 2 years from the date of first delivery of coal to SGE. US$250,000 was received to 30
June 2021.
BBM will repay the US$2.0M to SGE through a reduction in the coal sales price over the term of the agreement. The
repayment schedule to SGE will be calculated by apportioning the US$2.0M consideration over the total tonnage of coal
allocated to SGE over the term of the Agreement, which will be deducted from the sales price (e.g. If BBM allocates
0.6Mt of coal to SGE, then the US$2.0M in consideration will result in a US$3.33/t reduction in coal sales price for that
tonnage.) The reduction in coal sales price shall be adjusted in the final period of the Agreement to ensure full
repayment of the US$2.0M consideration.
Coal Pricing
Coal sold under the Agreement shall be priced in US Dollars per metric tonne on an FOB basis, with the price calculated
using the below methodology:
i.
ii.
Appropriate prices (the “Index Prices”) for seaborne traded Coking and PCI Coals will be obtained from a
recognised market data provider (e.g. Platts); and
The Index Prices will then be adjusted in order to calculate the prices to be used in the Agreement between
BBM and SGE (the “Coal Sales Prices”), with the adjustments made to reflect:
a. The quality and specifications of the coal produced by BBM, using the methodologies published by the
provider of the Index Price; and
b. Freight differentials.
SGE will also receive a small discount off the Coal Sales Prices. In the event SGE is able to sell the coal at a price higher
than the Coal Sales Prices, the additional amount shall be shared equally between BBM and SGE. If BBM fails to deliver
coal such that a maximum of 0.6MT is not reached within a period of two years from the first delivery to SGE, then BBM
will be considered in default and the US$2M (less any amounts repaid) converts to debt, plus interest using SIBOR. In
the event that SGE defaults on the payment schedule for the US$2.0M set out above, BBM has the right to adjust the
coal allotment to SGE under the Agreement in line with the payment received and the right to sell directly into the
domestic Indonesian market.
COKAL LIMITED Annual Report 2021 | Page 9
Review of Operations
Agreements with International Commodity Trade Pte Ltd (ICT)
In June 2021 BBM negotiated a binding commitment for a US$20m debt financing facility for development of the BBM
Project. A Coal Sales Rights Agreement was also negotiated, assisting with the company’s working capital. This
attractive financing structure avoids any dilution for Cokal shareholders. Drawdown of the financing facility has
commenced.
In view of the above corporate financing facility, Cokal advised CRCC subsidiary CR-BFJV it will not proceed with the
facility previously discussed with them.
ICT is a company incorporated in Singapore whose main business is investment and trading in coal. ICT is controlled by
a party that also controls Aahana Mineral Resources Sdn Bhd, a substantial shareholder of Cokal holding 19.97% of the
Company’s shares, who has one representative on the Company’s Board of Directors. The largest shareholder of ICT is
Eddie Chin Wai Fong, an ex-CEO and a founding member of PT Bayan Resources Tbk, listed on the Jakarta stock exchange
(BYAN.JK). Mr Chin, who has over 30 years of experience in the coal industry in Indonesia, has the contacts, experience
and financial capability to complete the funding transaction and marketing of the coal.
BBM executed two binding agreements with ICT to fund the development of mining in its BBM Project: a Capital
Participation Agreement and an International Coal Marketing Agreement. The binding Capital Participation Agreement
with ICT is for the provision of US$20m to fund BBM mine development. The binding International Coal Marketing
Agreement also entered into with ICT will enable BBM to market its coal to the international market and will also assist
BBM in financing its coal stockpile at the river jetty. In return, BBM agrees to provide international coal marketing rights
to ICT for the marketing of BBM coal for its overseas markets.
The ICT funding facility and coal marketing agreement provide an attractive and strategic funding solution for Cokal to
enable the transformation of BBM into a major international coal producer. Cokal has chosen to obtain the funding from
ICT as it is available immediately and on similar terms to the previous funding arrangement that was to be provided by
China Rail and Beijing Fidick. The funding from ICT is attractive and fair for Cokal shareholders as it allows for the funding
of the BBM project without dilution of ownership. The debt will be repaid from project operations with no recourse to
Cokal other than pursuant to a Corporate Guarantee provided by Cokal Limited.
Details of the terms of the Capital Participation Agreement and International Coal Marketing Agreement are contained
in the Company’s announcement dated 14 July 2021
MINE OPERATIONS STAFF
Cokal/BBM has assembled an expert team in preparation for the imminent commencement of mining operations at its
BBM mine in Central Kalimantan. This team will direct and manage Cokal's BBM and other mines which will be operated
mainly by contractors.
Cokal Limited’s Board and management of the Group is as follows:
COKAL LIMITED Annual Report 2021 | Page 10
COKAL LIMITED Annual Report 2021 | Page 11
1Domenic MartinoNon-Executive Chairman§Founding Director of Cokaland a CharteredAccountant with manyyears of experience as adirector of ASX listedcompanies§Previously CEO DeloitteTouche Tohmatsu,Australia§Key player in the creationof shareholder value in anumber ofASX companiesincluding Sydney Gas, PanAsia, Clean Global Energy,NuEnergy Capital§Lengthy track record ofoperating in Indonesia, successfully closing a number ofenergy and resources deals with key local playersAllen DelbridgeDirector§Mining engineer with over30 years experience in themining industry includingIndonesia§A member of PERHAPI andAusIMM and a recognizedcompetent person underthe KCMI and JORC codes§Deep experience at alllevels of operations andmine planning, including:̵Pit shell optimizations̵LOM (and stage push back) pit design̵Ore Reserve reporting̵Start-up mine schedules/plans̵Tenders̵Developing Systems̵Business improvement projects and Financial evaluationsKaran BangurDirector§Over a decade of experiencein operating miningandlogistics projects in SouthEastAsia, including projectsin Indonesia§Significant experience withIndonesian mining laws§Director of Aahana MineralResources Sdn Bhd, thelargest shareholder in Cokal§Owner/operator of HMEcoal fleet in Nth Kalimantan§Evaluation of Iron Ore,Bauxite and Graphiteconcentrate recoveryprojects in Indonesia§Logistics & port dvlpmntinIndonesia and other parts ofSE Asia; and developing &operating Iron Oretenements in MalaysiaEddie ChinPresident Commissioner of BBM§BSc (Hons) Civil Engineering(University of Glasgow)§President Commissioner ofBBM since June 2019§Significant shareholder ofAahana Mineral ResourcesSdn Bhd, largestshareholder in Cokal§Founding member of majorIndonesian coal miner PTBayan Resources tbk§CEO of the Bayan Groupbetween 2005 and Jan 2018§Key person in thedevelopment of the BayanGroup into a globallysignificant coal producer§Managing Director of theDesaria Group of CompaniesPak SukardiPresident Director of BBM§40 years of mining andplantation industryexperience in Indonesia§Includes operational rolesand Board / Seniormanagement positionsJim ColemanCEO Cokal§Mining engineer and Fellow of AusIMM§50 years experience in all aspects of open cut and underground mining including the application of in-pit crushing and conveying systems§20 years in corporate management of operations for major international companies including Utah Development Company, Rio Tinto and BHP§Owned and managed a highly successful mining consultancy business, employing 40 people and managing operations throughout Australia and the SE Asia regionMasruri YahyaGeneral Manager MinesCokal§31 years of mining experience, including 17 years of Snr Management§Expert in Indonesian mine engineering, operations and permitting§Previously Chief Operating Officer for PT Darma Henwa Tbk §Held senior positions at PT ArutminIndonesia (PT Bumi Resources), initially as Regional Mine Manager and Head of Engineering (over construction & operations of all mine/port infrastructure facilities) and subsequently as Chief Operating Officer§Previously with PT BHP Coal IndonesiaLuki WiliantoGeology ManagerCokal§Geological Engineer with 15 years Indonesian coal mining experience§Member of MAusIMM and an Indonesian Competent Person of “Ikatan Ahli Geologi” (CPI-IAGI)§Previous positions with PT Thiess Contractors Indonesia, PT Britmindo (Mining Consultant) and PT Wahana Baratama Mining (Bayan Resources)§Experience leading due diligence, exploration programs and mining studies, comprising geological modelling, resource estimation, mine planning and reporting in accordance with the JORC Code and KCMIMuhamad Arie CahyonoMine Planning ManagerCokal§15 years mining experience, with particular expertise in coal geological modelling, mine planning and management of contractors§Previously positions with PT Thiess Contractors Indonesia, PT Britmindo (Mining Consultant) and PT Bayan Resources Tbk. §Member of PERHAPI and also registered as Competent Person Indonesia (CPI).Loke Cherng HueiDirector BBM§BE (Civil) with 35 years mining, marine and construction industry experience in Malaysia and Indonesia§Previously Director and General Manger roles in the Desaria group of companies in Malaysia
Review of Operations
CORPORATE ACTIVITY
Krakatau Steel
Over the year, liaison has been maintained with PT Krakatau Steel regarding the future sale of BBM PCI coal to its new
PCI capable blast furnace. It is believed Krakatau retains its interest in obtaining this local supply from BBM to replace
imported supply from Australia.
BBM Vendor Payment Converted to Production Based Payment
During the financial year, the Company entered into a Settlement Agreement with BBM Vendor Mr Hery Gianto relating
to the US$10M contingent liability in respect of the acquisition of 60% of PT Bumi Barito.
Previously this final BBM Vendor payment was due on commencement of production. It has now been agreed that an
amount of US$10.5 million will be paid via:
1. US$200,000 within 30 days of signing the agreement;
2. During the first and second year of coal sales to a third party, monthly at a rate of US$2 per tonne of coal sold;
3. From the third year of coal sales to a third party, monthly at a rate of US$3 per tonne of coal sold.
Payments under items 2 and 3 are to total US$10.3 million.
Aahana Mineral Resources Loan Facility
During the year the loan facility provided by Aahana Minerals Resources SDN BHD was terminated and replaced by a
new loan facility with an increased facility amount of US$800,000. The facility interest rate is 12% per annum,
compounded monthly and payable on the funds drawn down. US$700,000 has been drawn under the facility with an
accrued interest of US$45,323 as at 30 June 2021. The loan is repayable within 30 days of receipt of a written demand for
repayment by the Lender. Cokal Limited has provided a corporate guarantee for payment the Loan.
Alpine Invest Holding Ltd Loan Facility
During the year a loan facility was provided by Alpine Invest Holding Ltd totalling US$750,000. The facility interest rate
is 12% per annum, compounded monthly and payable on the funds drawn down. US$750,000 has been drawn under
the facility with an accrued interest of US$10,743 as at 30 June 2021.
Staff Appointments
Staff have been employed to manage activities in BBM relating to the repair of the access road and in preparation for
mining.
This includes:
• Chief Security officer;
• Human Resource officer;
• Accounts clerk;
•
•
•
Earthworks supervisor;
Equipment operators;
Paramedic:
• HSE officer.
COKAL LIMITED Annual Report 2021 | Page 12
Review of Operations
BBM Jakarta Office Relocation
It has been decided to relocate the Cokal/BBM Jakarta office to be more suitable for the current situation.
The BBM and Cokal office in Jakarta is now at:
THE BELLEZZA OFFICE TOWER
21 Floor, Unit 3 & 5
ARTERI PERMATA HIJAU
JALAN MAYJEN SOEPENO KAV 34
PERMATA HIJAU, KEBAYORAN LAMA
JAKARTA SELATAN 10210
TEL : 021-30027133 & 021-30027166
INDONESIA
COVID-19
Both Indonesian and Australian operations have responded to the COVID-19 virus pandemic. Staff and contractors have
been minimally impacted and operations continue as planned. There have been some delays with finalising contracts
due to travel restrictions, with analysis of contractor bids for mining operations and finalisation of the infrastructure
agreement with China Rail delayed.
The Company has a focus on the well-being of its staff, contractors and the broader community and has implemented
measures to ensure their well-being including; health screening and temperature monitoring, spatial distancing
protocols, a high level of hygiene, change in flow of staff to and from the local community, and the minimisation of staff
in the Jakarta and Sydney administrative offices.
COKAL LIMITED Annual Report 2021 | Page 13
Directors' Report
Your Directors present their report for the year ended 30
June 2021.
During the past three years Patrick has not served as a
director of another listed company.
The following persons were Directors of Cokal Limited
(“Group”, “consolidated entity” or “Cokal”) during the
financial year and up to the date of this report, unless
otherwise stated:
Domenic Martino, Non-Executive Chairman
(Appointed Director on 24 December 2010 and
Chairman on 27 January 2017)
B. Bus, FCPA
Mr. Martino, 64 is a Chartered Accountant and an
experienced director of ASX listed companies. Previously
CEO of Deloitte Touch Tohmatsu in Australia, he has
significant experience in the development of "micro-cap"
companies.
• Former CEO Deloitte Touche Tohmatsu Australia.
• Key player in the re-birth of a broad grouping of ASX
companies including Sydney Gas, Pan Asia, Clean
Global Energy, NuEnergy Capital.
• Strong reputation in China.
• Lengthy track record of operating
in Indonesia,
successfully closed key energy and resources deals
with key local players.
• Proven track record in capital raisings across a range of
markets.
During the past three years Domenic has also served as a
Director of the following ASX listed companies:
• PYX Resources Limited (appointed 3 August 2012,
resigned 31 January 2020)
Patrick Hanna, Non-Executive Director
(Appointed on 24 December 2010, Resigned 24
November 2020)
B. Applied Science (Geology), CPI, FAusIMM
Mr Hanna has over 40 years’ experience as a coal geologist
in the areas of exploration and evaluation including
planning, budgeting and managing drilling programs in
Australia and Indonesia, gained since graduating from the
University of New South Wales in 1976. Mr Hanna has
authored and co-authored numerous coal
industry
publications.
• Geologist, 67, over 40 years’ experience all in coal.
• Extensive experience in Indonesian coal.
• Exploration Manager for Riversdale Mining, principal
responsibility for discovery and documentation of new
coking coal basin in Mozambique.
• Ex-member of JORC committee.
• Principal Geologist SRK Australia for 6 years.
• Author of 19 technical publications.
• Reviewed and consulted on over 40 coal projects
globally.
Karan Bangur, Non-Executive Director
(Appointed on 10 April 2019)
BCom
Mr Bangur, 35 has over a decade of experience in
operating mining and logistics projects in South East Asia.
He is well experienced and familiar with Indonesian mining
and general laws relating to on ground operations due to
Indonesia.
in several projects
his experience
in
Current ongoing and previous projects include:
• Operations of thermal coal mine in Tanah Grogot, East
Kalimantan in capacity of financier.
• Operating fleet of HEMM (Heavy Earth Moving
Equipment) in thermal coal mine project in Tarakan,
North Kalimantan in capacity of owner.
• He currently serves as Managing Director of Aahana
Global Resources & Investment Pte Ltd, which is
primarily an investment and holding Co incorporated
in Singapore 2008- Present.
• He serves as Director in Aahana Mineral Resources Sdn
Bhd, which is the single majority shareholder in Cokal
Ltd. 2019 - Present.
• Previous assignments involve evaluation and planning
of Iron Ore, Bauxite Ore and Graphite concentrate
recovery projects in Indonesia.
• Previous projects
logistics and port
include
development in Indonesia and other parts of SE Asia.
• Development and operating Iron Ore tenement in
Malaysia including HEMM fleet management and
rental services.
David (Allen) Delbridge, Non-Executive Director
(Appointed on 17 March 2020)
B.Mining Engineering, PERHAPI, AusIMM
Mr Delbridge has over 30 years’ experience in the mining
industry. He is a recognised competent person under the
KCMI code as well as for JORC reserve statement for open
cut coal. He has international experience, working for over
7 years as an expatriate in Indonesia. He has significant on-
site operations experience,
interactively providing
practical and technical direction and team leadership for
maintaining and improving mining operations at a senior
leadership level.
Current ongoing and previous projects include:
• Worked at Citic Pacific Mining on its Sino Iron Ore
project in Western Australia
• Worked at Jiujiang Mining Australia Pty Ltd on its Cairn
Hill project in South Australia
• Worked at Bayan Resources Group as Manager – Mine
Planning and Development in Jakarta with operational
sites in Kalimantan
COKAL LIMITED Annual Report 2021 | Page 14
Louisa Martino (Youens), Joint Company Secretary
(Appointed on 9 August 2017)
BCom, CA
Ms Martino provides company secretarial and accounting
services to a number of listed entities through Indian
Ocean Capital.
Previously Ms Martino worked for a corporate finance
company, assisting with company compliance (ASIC and
ASX) and capital raisings. She also has experience working
for a government organisation
its Business
Development division where she performed reviews of
business opportunities and prepared business case
analysis for those seeking Government funding.
in
Prior to that, Ms Martino worked for a major accounting
firm in Perth, London and Sydney where she provided
corporate advisory services, predominantly on IPOs and
also performed due diligence reviews.
She has a Bachelor of Commerce from the University of
Western Australia, is a member of Chartered Accountants
Australia and New Zealand, a member of the Financial
Services Institute of Australasia (FINSIA) and a Fellow of
the Governance Institute of Australia (FGIA).
Miranda Yuan, Joint Company Secretary
(Appointed 1 July 2020)
MFin, MCom, CPA
Ms Yuan provides comprehensive accounting services and
auditing assistance to a number of public and listed
companies through Indian Ocean Corporate. She has
experience in company secretarial work in a broad range
of ASX listed companies. She also has experience working
as a Finance Analyst to provide corporate advisory services
for cross-border M&A, capital raisings, IPOs/RTOs and to
as a Finance perform due diligence reviews.
Ms Yuan is an honours graduate in Finance from Aberdeen
University, she holds a Master degree of Commerce in
Finance from the University of New South of Wales and
Master degree of Professional Accounting from Charles
Sturt University. Ms Yuan is an Associate member of
Certified Practicing Accountant (CPA) Australia.
Directors' Report
The following person was Chief Operating Officer of Cokal
Limited (“Group”, “consolidated entity” or “Cokal”) during
the financial year and up to the date of this report, unless
otherwise stated:
Mr James (Jim) Coleman is Chief executive Officer
whose details are below.
James (Jim) Coleman, Chief Executive Officer
(Appointed on 27 July 2018)
B. Eng (Hons, Mining), FAusIMM
Mr Coleman, 74 has a proven 51-year track record in
corporate management of operations for large successful
companies including Riversdale Mining, The Griffin Group,
The Electricity Trust of South Australia, Utah Development
Company and Rio Tinto.
He has led multi-faceted teams and consortia for large coal
projects in developing countries and also specialised in
deep mines in soft saturated strata. Mr Coleman was
responsible for the development of Thailand’s 14 million
tonnes per annum coal mine which feeds directly into
EGAT’s on-site power station in northern Thailand.
As a mining engineer, he has over 50 years’ experience in
open cut and underground mining specialising in mine
management, project development and operation using a
variety of equipment including extensive application of in-
pit crushing and conveying systems. He designed strategic
mine planning to optimise economic returns for various
coal operations. He was also responsible for the
in Australia,
development of
India and
Mozambique, Thailand, The Philippines,
throughout SE Asia. Mr Coleman has specific expertise in
application of selective mining systems for low ash high
quality coals to minimise dilution.
integrated projects
Jim possesses a high awareness in the application of
shallow river barging systems to transport coal from inland
projects over long distances. He participated in the
successful evaluation of 500 km shallow water barging on
the Zambezi River in Mozambique for the transportation
of coking coal from Riversdale’s Benga project to off-shore
mother vessels. This experience is in line with Cokal’s plans
to use shallow-river barging on the Barito River to deliver
the coking coal in good condition to the nearby Asian
market place.
Through the 1980s and 1990s, he owned and managed a
highly successful mining consulting business (Coleman and
Associates) employing some 40 mining professionals and
managing operations concurrently throughout Australia
and in five countries including Australian Government aid
funded projects in SE Asia.
The following persons were Company Secretaries of Cokal
Limited (“Group”, “consolidated entity” or “Cokal”) during
the financial year and up to the date of this report, unless
otherwise stated:
COKAL LIMITED Annual Report 2021 | Page 15
Directors' Report
Interests in Shares and Options
At the date of this report, the interests of the Directors in
the shares of Cokal Limited are shown in the table below.
Domenic Martino
Patrick Hanna 1
Karan Bangur
David Delbridge
1 As at resignation
Ordinary Shares
Options
41,688,512
27,000,000
-
-
184,641,719
37,500,000
-
-
Principal Activities
The principal activities of the consolidated entity during
the financial year were focused on the identification and
development of coal within the highly prospective Central
Kalimantan coking coal basin in Indonesia.
Operating Results
For the year ended 30 June 2021, the loss for the
consolidated entity after providing for income tax was
US$ 2,696,826 (2020: US$2,573,822).
Dividends Paid or Recommended
There were no dividends paid or recommended during the
financial year.
Review of Operations
Detailed comments on operations and exploration
programs up to the date of this report are included
separately
in the Annual Report under Review of
Operations.
Review of Financial Condition
Capital Structure
At 30 June 2021, the consolidated entity had 924,582,313
ordinary shares and 105,000,000 unlisted options on
issue.
Financial Position
The net assets of the consolidated entity have decreased
by US$2,343,579 from US$8,854,870 at 30 June 2020 to
US$6,511,291 at 30 June 2021.
Treasury Policy
The consolidated entity does not have a formally
established treasury function. The Board is responsible for
managing the consolidated entity’s finance facilities.
Some goods and services purchased by the consolidated
entity, along with the payments made to the vendors of
the Kalimantan coal projects, are in foreign currencies (AU
dollars or Indonesian Rupiah).
The consolidated entity does not currently undertake
hedging of any kind.
to
Liquidity and Funding
The consolidated entity believes it has sufficient access to
funds
and
exploration/development activities, and to allow the
consolidated entity to take advantage of favourable
business opportunities, not specifically budgeted for, or to
fund unforeseen expenditure.
operations
finance
its
Significant Changes in the State of
Affairs
There have been no significant changes in the Group’s
state of affairs during the year ended 30 June 2021.
Significant Events after
Reporting Date
the
Subsequent to year end, the group concluded a binding
commitment for a US$20m debt financing facility for
development of the Bumi Barito Mineral (BBM) Coking
Coal Project with International Commodity Trade Ptd Ltd
(“ICT”) on 14 July 2021.
The first drawdown for US$2 million of the debt facility
from ICT has been received by Cokal Limited on 20 July
2021.
In addition on 14 July 2021, the group completed a
binding International Coal Marketing Agreement, also
entered into with ICT, enabling BBM to market its coal
to the international market and assisting BBM in
financing its coal stockpile at the river jetty. In return,
BBM agrees to provide international coal marketing
rights to ICT for the marketing of BBM coal for its
overseas markets.
On 18 August 2021, 12,500,000 ordinary shares in Cokal
Limited were issued as a result of the exercise of options.
Other than the above there have been no other
significant events after reporting date.
Future Developments, Prospects
and Business Strategies
Likely developments in the operations of the consolidated
entity and the expected results of those operations in
subsequent financial years have been discussed where
appropriate in the Annual Report under Review of
Operations.
There are no further developments of which the Directors
are aware which could be expected to affect the results of
the consolidated entity’s operations
in subsequent
financial years.
COKAL LIMITED Annual Report 2021 | Page 16
Directors' Report
Business Results
The prospects of the Group in developing its properties in
Indonesia may be affected by a number of factors. These
factors are similar to most exploration companies moving
through the exploration phase and attempting to get
projects into production. Some of these factors include:
•
Exploration - the results of the exploration activities
at the BBM project and the tenements in Central
Kalimantan may be such that the estimated resources
are insufficient to justify the financial viability of the
projects.
•
•
Regulatory and Sovereign - the Group operates in
Indonesia and deals with local regulatory authorities
in relation to the operation and development of its
properties. The Group may not achieve the required
they may be
local
significantly delayed enabling
it to commence
production.
regulatory approvals, or
Funding - the Group may require additional funding
to move from the exploration/development phase to
the production phase of the BBM project and the
tenements in Central Kalimantan. There is no
certainty that the Group will have access to available
financial resources sufficient to fund its capital costs
and/or operating costs at that time.
• Development - the Group is involved in developing
greenfield projects in Indonesia which could result in
capital costs and/or operating costs at levels which do
not justify the economic development of the project.
• Market - there are numerous factors involved with
early stage development of its properties such as the
BBM project, including variance in commodity price
and labour costs which can result in projects being
uneconomical.
in relation to
Environmental Issues
The consolidated entity is subject to environmental
regulation
its exploration activities.
Indonesia where the Group’s main project is located in the
principal laws are Act No.41 of 1999 regarding Forestry
(the Forestry Law), Act No.4 of 2009 regarding Minerals
and Coal Mining (the Mining Law) and Act No. 32 of 2009
regarding Environmental Protection and Management
(the Environment Law). There are no matters that have
arisen in relation to environmental issues up to the date
of this report.
Non-Audit Services
No non-audit services were provided by Cokal’s auditor,
Hall Chadwick during the financial year ended 30 June
2021 (2020: Nil).
Remuneration Report (Audited)
This remuneration report for the year ended 30 June 2021
outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act
2001 (the Act) and its regulations. This information has
been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration
arrangements for key management personnel (KMP) who
are defined as those persons having authority and
responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly,
including any director (whether executive or otherwise) of
the consolidated entity.
For the purposes of this report, the term “executive”
includes the Chief Executive Officer, directors and other
senior management executives of the Group.
Remuneration report approval at FY20 AGM
The remuneration report for the 2020 financial year
received positive shareholder support with proxy votes of
89.59% in favour (of shares voted).
Remuneration Policy
The performance of the consolidated entity depends upon
the quality of its directors and executives. To prosper, the
consolidated entity must attract, motivate, and retain
highly skilled directors and executives.
The Board does not presently have a Remuneration and
Nomination Committee. The directors consider that the
consolidated entity is not of a size, nor are its affairs of
such complexity, as to justify the formation of any other
special or separate committee at this time. All matters
which might be dealt with by such a committee are
reviewed by the directors meeting as a Board.
in carrying out the functions of the
The Board,
Remuneration and Nomination Committee, is responsible
for
the compensation
arrangements of senior executives and consultants.
reviewing and negotiating
in carrying out the functions of the
The Board,
Remuneration and Nomination Committee, assess the
appropriateness of
the nature and amount of
remuneration of such officers on a periodic basis by
reference to relevant employment market conditions with
the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and
executive team. Such officers are given the opportunity to
receive their base remuneration in a variety of forms
including cash and fringe benefits. It is intended that the
manner of payments chosen will be optimal for the
recipient without creating undue cost for the consolidated
entity.
The consolidated entity aims to reward the Executive
Directors and senior management with a level and mix of
remuneration commensurate with their position and
responsibilities within the consolidated entity. The Board’s
policy is to align director and executive objectives with
shareholder and business objectives by providing a fixed
remuneration component and offering short and/or long-
term incentives as appropriate.
In accordance with best practice corporate governance,
the structure of non-executive directors, Executive
Directors and senior management remuneration
is
separate and distinct.
COKAL LIMITED Annual Report 2021 | Page 17
Directors' Report
Non-executive Director Remuneration
The Board seeks to set aggregate remuneration at a level which provides the consolidated entity with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Constitution of Cokal Limited and the ASX Listing Rules specify that the non-executive directors are entitled to
remuneration as determined by the consolidated entity in a general meeting to be apportioned among them in such manner
as the Directors agree and, in default of agreement, equally. The aggregate remuneration currently determined by Cokal
Limited is AU$500,000 per annum. Additionally, non-executive directors will be entitled to be reimbursed for properly incurred
expenses.
If a non-executive director performs extra services, which in the opinion of the directors are outside the scope of the ordinary
duties of the director, the consolidated entity may remunerate that director by payment of a fixed sum determined by the
directors in addition to or instead of the remuneration referred to above. However, no payment can be made if the effect
would be to exceed the maximum aggregate amount payable to non-executive directors. A non-executive director is entitled
to be paid travel and other expenses properly incurred by them in attending directors’ or general meetings of Cokal Limited
or otherwise in connection with the business of the consolidated entity.
The remuneration of the non-executive directors for the year ending 30 June 2021 is detailed in this Remuneration Report.
reward Executives for consolidated entity and individual performance;
Executive Directors and Senior Management Remuneration
The consolidated entity aims to reward the Executive Directors and senior management with a level and mix of remuneration
commensurate with their position and responsibilities within the consolidated entity so as to:
•
• align the interests of executives with those of shareholders;
•
• ensure total remuneration is competitive by market standards.
The remuneration of the Executive Directors and senior management may from time to time be fixed by the Board. As noted
above, the Board’s policy is to align the Executive Directors and senior management objectives with shareholder and business
objectives by providing a fixed remuneration component and offering short and/or long-term incentives as appropriate.
link reward with the strategic goals and performance of the consolidated entity; and
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position
and is competitive in the market. Short-term incentives may be provided in the form of performance bonuses. Fixed
remuneration and short-term incentives are reviewed annually by the Board, in carrying out the functions of the Remuneration
Committee, and the process consists of a review of Company-wide and individual performance, relevant comparative
remuneration in the market and internal, and where appropriate, external advice on policies and practices.
Senior management are given the opportunity to receive their fixed remuneration in a variety of forms including cash and
fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be
optimal for the recipient without creating undue cost for the consolidated entity.
Long-term incentives may be provided in the form of options and/or the issue of shares following the completion of
satisfactory time periods of service. The consolidated entity uses employee continuity of service and the future share price to
align comparative shareholder return and reward for executives.
The remuneration of the Executive Directors and senior management for the year ended 30 June 2021 is detailed in this
Remuneration Report.
Relationship between Remuneration and Consolidated Entity Performance
During the financial year, the consolidated entity has generated losses as its principal activity was exploration and
development within the Central Kalimantan coking coal basin in Indonesia.
The following table shows the performances of the consolidated entity for the last five years:
Year-end (30 June)
Share price (US$)
2021
0.04
Basic (loss) per share (US cents)
(0.29)
2020
0.04
(0.28)
2019
0.03
(0.26)
2018
0.03
(1.18)
2017
0.04
(1.96)
There were no dividends paid during the year.
As the consolidated entity was still in the exploration and development stage during the financial year, the link between
remuneration, consolidated entity performance and shareholder wealth is tenuous. Share prices are subject to the influence
of coal prices and market sentiment toward the sector, and as such increases or decreases may occur quite independent of
executive performance or remuneration.
Employment and Services Agreements
It is the Board’s policy that employment and/or services agreements are entered into with all Executive Directors, senior
management, and employees.
COKAL LIMITED Annual Report 2021 | Page 18
Directors' Report
Agreements do not provide
for pre-determining
compensation values or method of payment. Rather the
amount of compensation is determined by the Board,
where applicable with the remuneration policy set out
above.
KMP are entitled to their statutory entitlements, where
applicable of accrued annual leave and long service leave
together with any superannuation on termination. No
other termination payments are payable.
Senior Management
Chief Executive Officer
Mr James Coleman was appointed Chief Executive Officer
on 27th of July 2018. The Company has entered into an
agreement with Mr Coleman.
The agreement may be terminated with 4 months’ notice
or at any time with cause.
Details of Key Management Personnel (KMP)
(i) Directors
Domenic Martino, Chairman and Non-Executive
Director (appointed Non-Executive Director 24
December 2010, appointed Chairman on 27 January
2017)
Patrick Hanna, Non-Executive Director
(resigned 24 November 2020)
Gerhardus Kielenstyn, Executive Director -
Indonesia Country Manager (resigned 21 August
2019)
Karan Bangur, Non-Executive Director (appointed
10 April 2019)
David Delbridge, Non-Executive Director (appointed
17 March 2020)
(ii) Senior Management
James Coleman, Chief Executive Officer (appointed
27 July 2018)
Remuneration Details
The following table of benefits and payments details, in
respect to the financial years ended 30 June 2021 and
2020, the component of remuneration for each key
management person of the consolidated entity:
Short-Term Benefits
Post-
Employment
Termination
Benefits
Share-based
payments
Total
2021
Salary &
Fees
Cash
Bonus
Other short
-term
benefits
Superannuation
US$
US$
US$
US$
US$
Equity-
settled
(options)
US$
Cash-settled
US$
US$
%
Remuneration
as equity
Directors
Domenic Martino
Patrick Hanna**
Karan Bangur*
David Delbridge*^
Total
Senior Management
James Coleman
Total
59,143
11,201
144,476
33,604
248,424
84,832
333,256
-
-
-
-
-
-
-
-
-
2,368
-
2,368
-
2,368
-
-
4,809
-
4,809
-
4,809
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,143
11,201
151,653
33,604
255,601
84,832
340,433
-
-
-
-
-
-
-
* In addition to director fees, Mr Bangur and Mr Delbridge receive fees for services provided to BBM which are included in the schedule
^ Appointed 17 March 2020
** Resigned on 24 November 2020
COKAL LIMITED Annual Report 2021 | Page 19
Directors' Report
Short-Term Benefits
Post-
Employment
Termination
Benefits
Share-based
payments
Total
2020
Salary &
Fees
Cash
Bonus
Other short
-term
benefits
Superannuation
US$
US$
US$
US$
US$
Equity-
settled
(options)
US$
Cash-settled
US$
US$
%
Remuneration
as equity
Directors
Domenic Martino
Patrick Hanna
Karan Bangur*
David Delbridge*^
53,171
24,169
113,814
26,854
Gerhardus Kielenstyn#
-
Total
218,008
Senior Management
James Coleman
Total
131,473
349,481
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,768
-
-
4,768
-
4,768
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,700
55,700
-
-
-
-
-
-
-
-
53,171
24,169
118,583
26,854
-
222,776
187,173
409,949
-
-
-
-
-
-
-
-
* In addition to director fees, Mr Bangur and Mr Delbridge receive fees for services provided to BBM which are included in the schedule
^ Appointed 17 March 2020
# Resigned on 21 August 2019
Cash Bonuses, Performance-related Bonuses and Share-based Payments
KMP and other executives may be paid cash bonuses or performance-related bonuses. Remuneration options on issue during
the 2021 financial year to KMP were as follows:
Remun-
eration
type
Grant date
Vesting
date
Number
Exercise
Price
US$
Grant
value
(per
option)
US$
Percentage
vested /
paid during
year
Percentage
forfeited/
cancelled
during year
Percentage
remaining
as
unvested
%
%
%
Expiry date
Consolidated entity KMP
James
Coleman
James
Coleman
James
Coleman
Options
20/12/2018
Note 1 3,000,000
0.03
0.01
Options
Options
20/12/2018
20/12/2018
Note 2 3,000,000
0.04
0.01
Note 3 3,000,000
0.05
0.01
-
-
-
Options
20/12/2018
James
Coleman
Note 1: vesting on achieving a consistent production rate for three months of 20,000 tonnes of coal per month
Note 2: vesting on achieving a consistent production rate for three months of 40,000 tonnes of coal per month
Note 3: vesting upon commencement of shallow river barging
Note 4: vesting upon first shipment of coking coal from BBM
Note 4 5,000,000
0.07
0.01
-
-
-
-
-
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
COKAL LIMITED Annual Report 2021 | Page 20
Directors' Report
Options holdings
Details of option held and share-based payments to KMP and other executives awarded and vested/unvested during the year
ended 30 June 2021 and 30 June 2020 are detailed in the table below:
Balance
1 July 2020
Granted as
Remuneration
Exercise
of Options
Net Change
Other
Balance
30 June 2021
Total vested
at 30 June
2021
Total vested
and
exercisable at
30 June 2021
Total vested and
unexercisable at
30 June 2020
Directors
Domenic Martino
Karan Bangur
Patrick Hanna^
David Delbridge#
Senior Management
James Coleman
Total
-
37,500,000
-
-
14,000,000
51,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 37,500,000
-
-
-
-
-
37,500,000
-
-
-
37,500,000
-
-
- 14,000,000
- 51,500,000
-
37,500,000
-
37,500,000
-
-
-
-
-
-
Balance
1 July 2019
Granted as
Remuneration
Exercise
of Options
Net Change
Other
Balance
30 June 2020
Total vested
at 30 June
2020
Total vested
and
exercisable at
30 June 2020
Total vested and
unexercisable at
30 June 2020
Directors
Domenic Martino
Karan Bangur
Patrick Hanna^
David Delbridge#
Gerhardus Kielenstyn*
Senior Management
James Coleman
Total
-
37,500,000
-
-
5,000,000
14,000,000
56,500,000
# Appointed 17 March 2020
^ Resigned on 24 November 2020
* Resigned on 21 August 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 37,500,000
-
-
-
-
5,000,000
-
-
37,500,000
-
-
-
-
37,500,000
-
-
-
- 14,000,000
- 56,500,000
-
37,500,000
-
37,500,000
-
-
-
-
-
-
-
The options were issued to the director and senior management of Cokal Limited to align comparative shareholder return and
reward for director and senior management.
All options issued by Cokal Limited entitle the holder to one ordinary share in Cokal Limited for each option exercised.
All options granted as part of remuneration were granted for nil consideration. Once vested, options can be exercised at any
time up to the expiry date.
The consolidated entity does not currently have a policy prohibiting directors and executives from entering into arrangements
to protect the value of unvested options. No directors or executives have entered into contracts to hedge their exposure to
options awarded as part of their remuneration package.
Shareholdings
Details of ordinary shares held directly, indirectly or beneficially by KMP and their related parties are as follows:
Directors
Domenic Martino
Patrick Hanna^
Karan Bangur
David Delbridge #
Senior Management
James Coleman
Total
Balance
1 July 2020
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Balance
30 June 2021 ●
41,688,512
27,900,000
184,641,719
-
4,518,845
258,749,076
-
-
-
-
-
-
-
-
-
-
-
-
-
(900,000)
-
-
41,688,512
27,000,000
184,641,719
-
-
(900,000)
4,518,845
257,849,076
COKAL LIMITED Annual Report 2021 | Page 21
Directors' Report
Directors
Domenic Martino
Patrick Hanna^
Karan Bangur
David Delbridge #
Gerhardus Kielenstyn*
Senior Management
James Coleman
Total
Balance
1 July 2019
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Balance
30 June 2020 ●
37,120,001
25,800,000
148,125,000
-
-
1,245,031
212,290,032
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,568,511
2,100,000
36,516,719
-
-
41,688,512
27,900,000
184,641,719
-
-
3,273,814
46,459,044
4,518,845
258,749,076
# Appointed 17 March 2020
^ Resigned on 24 November 2020
* Resigned on 21 August 2019
● If position vacated during the year, as at resignation date
Transactions with KMP and their related entities
Mr Domenic Martino
As at 30 June 2021 director fees totaling US$110,041 (2020: US$72,338) remain outstanding to Mr Martino.
•
• On 9 August 2017 the Company entered into an agreement with Indian Ocean Corporate Pty Ltd, a company of which Mr
Martino is a director, for company secretarial services at a cost of AU$4,000 (excl GST) per month. The services are based
on normal commercial terms and conditions. During the 2021 financial year, Indian Ocean Corporate Pty Ltd has provided
company secretarial services totaling US$39,429 (2020: US$35,447) and a management consulting service totaling US$
7,144 (2020: US$ 55,000). Indian Ocean Consulting Group Pty Ltd has provided company taxation services totaling US$
34,650 (2020:US$22,000). As at 30 June 2021, company secretarial fees of US$Nil (2020: US$Nil) and management
consulting services of US$7,144 and company taxation services of US$Nil (2020:US$12,650) remain outstanding. In
addition, during the 2021 financial year, Indian Ocean Corporate Pty Ltd assisted with the preparation of reports, for an
amount totaling US$33,535 (2020: US$25,847). An amount of US$11,292 (2020: US$8,493) was outstanding as at 30 June
2021.
Mr Patrick Hanna
•
•
As at 30 June 2021 director fees totaling US$90,171 (2020: US$86,436) remain outstanding to Mr Hanna.
As at 30 June 2021 a loan of USD$74,065 (AUD$108,500) (2020: US$72,842/AUD$108,500) was owing to Mr Hanna by
the Company. This loan was for working capital purposes, is repayable on demand and does not accrue interest.
Mr Karan Bangur
As at 30 June 2021 director fees totaling US$28,700 (2020: US$13,427) remain outstanding to Mr Bangur.
•
• During the year the loan facility provided by Aahana Minerals Resources SDN BHD (Lender), a related party to Mr Karan
Bangur, was terminated and replaced by a new loan facility with an increased facility amount of US$800,000. The facility
interest rate is 12% per annum, compounded monthly and payable on the funds drawn down. US$700,000 has been
drawn under the facility with accrued interest of US$45,323 owing as at 30 June 2021. The loan is repayable within 30
days of receipt of a written demand for repayment by the Lender.
Mr David Delbridge
•
•
As at 30 June 2021 director fees totaling US$5,941 (2020: US$6,714) remain outstanding to Mr Delbridge.
The Company’s Singaporean subsidiary has entered into a consulting agreement with a company that is a related party
of Mr Delbridge. PT TEDD Jasa Konsultasi. During the financial year consulting services totaling AU$100,000 (US$74,676)
(2020:Nil) were paid to PT TEDD Jasa Konsultasi, with US$5,260 owing as at 30 June 2021 (30 June 2020: Nil).
Mr James Coleman
•
As at 30 June 2021 remuneration totaling US$128,774 (2020: US$75,527) remains outstanding to Mr Coleman.
END OF REMUNERATION REPORT
COKAL LIMITED Annual Report 2021 | Page 22
Directors' Report
Directors’ Meetings
The number of meetings of Directors held during the year and the number of meetings attended by each Director was as
follows:
Board
Number of meetings
held while in office
Meetings
attended
Domenic Martino
Pat Hanna
Karan Bangur
David Delbridge
3
2
3
3
3
2
3
3
Indemnification and Insurance of Directors, Officers and Auditor
Each of the current Directors and Secretaries of Cokal Limited have entered into a Deed with Cokal Limited whereby Cokal
Limited has provided certain contractual rights of access to books and records of Cokal Limited to those Directors and
Secretaries.
Cokal Limited has insured all of the Directors of the consolidated entity. The contract of insurance prohibits the disclosure of
the nature of the liabilities covered and amount of the premium paid. The Corporations Act does not require disclosure of the
information in these circumstances.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Hall Chadwick Pty Ltd, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Hall Chadwick Pty Ltd during or since the financial year.
Options
At 30 June 2021, there were 105,000,000 unissued ordinary shares under options as follows:
•
•
•
•
•
•
•
75,000,000 unlisted options exercisable at AU$0.016 on or before 16 February 2023. As part of the Company’s debt
restructure, it was agreed that 37.5 million of these options will not be exercised
1,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021
3,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021 (vesting upon production of 20,000
tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.055 on or before 20 December 2021 (vesting upon production of 40,000
tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.07 on or before 20 December 2021 (vesting upon commencement of
shallow river barging)
5,000,000 unlisted options exercisable at AU$0.10 on or before 20 December 2021 (vesting upon first shipment of coking
coal from BBM)
15,000,000 unlisted options exercisable at AU$0.05 on or before 17 August 2023
No option holder has any right under the options to participate in any other share issue of Cokal Limited or any other entity.
Subsequent to year end, 12,500,000 ordinary shares in Cokal Limited were issued as a result of the exercise of options.
COKAL LIMITED Annual Report 2021 | Page 23
Directors' Report
Proceedings on Behalf of the
Consolidated Entity
No person has applied for leave of Court to bring
proceedings on behalf of the consolidated entity or
intervene in any proceedings to which the consolidated
entity is a party for the purposes of taking responsibility
on behalf of the consolidated entity for all or any part of
those proceedings.
The consolidated entity was not a party to any such
proceedings during the year.
Auditor’s Independence
Declaration
The Auditor’s Independence Declaration forms part of the
Directors’ Report and can be found on page 25.
Corporate Governance
In recognising the need for the highest standards of
corporate behaviour and accountability, the directors of
Cokal Limited support and have adhered to the principles
of corporate governance. Cokal Limited’s Corporate
Governance Statement has been made publicly available
on the Company’s website at: www.cokal.com.au.
Annual Resource and Reserve
Statement
The Company released its Annual Resource and Reserve
Statement on the ASX platform on 28 September 2021.
The Statement can also be found on the Company’s
website at www.cokal.com.au.
This report is signed in accordance with a resolution of the directors.
Cokal Limited
Domenic Martino
Chairman
Sydney, 29 September 2021
COKAL LIMITED Annual Report 2021 | Page 24
Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the year
ended 30 June 2021
Note
2
12
22(b)
4
Revenue and other income
Employee benefits expense
Depreciation and amortisation expense
Production expenses
Finance costs
Legal expenses
Administration and consulting expenses
Licence fees
Commission expense
Share based payment
Other expenses
Loss before income tax expense
Income tax expense
Loss for the period
Other comprehensive income
Items may be reclassified to profit or loss in
subsequent periods (net of tax):
Exchange translation differences
Total comprehensive loss for the period
Earnings/(Loss) per share for the loss attributable to owners of Cokal Limited:
Loss per share (cents per share)
Diluted loss per share (cents per share)
6
6
2021
US$
3,394
(867,376)
(162,273)
(466,262)
(56,314)
(21,274)
(346,407)
(465,368)
2020
US$
9,345,803
(934,733)
(255,901)
(356,086)
(23,756)
(26,535)
(308,969)
(582,262)
-
(9,261,535)
(307,407)
(7,539)
(50,700)
(119,148)
(2,696,826)
(2,573,822)
-
-
(2,696,826)
(2,573,822)
-
28,810
(2,696,826)
(2,545,012)
Cents
(0.29)
(0.29)
Cents
(0.28)
(0.28)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
COKAL LIMITED Annual Report 2021 | Page 26
Consolidated Statement of Financial Position as
at 30 June 2021
Note
7
7
11
9
10
13(a)
11
12
13(b)
14
13(b)
15
16
Current Assets
Cash and cash equivalents
Short term deposits
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Right of use assets
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Accounts payable and others
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
2021
US$
169,543
141,610
180,682
491,835
2020
US$
779,717
138,916
104,875
1,023,508
389,802
112,341
25,332,305
25,232,849
166,799
25,724
141,725
25,280
25,914,630
25,512,195
26,406,465
26,535,703
15,938,811
15,492,256
61,857
3,856,550
102,479
2,078,448
19,857,218
17,673,183
37,956
37,956
7,650
7,650
19,895,174
17,680,833
6,511,291
8,854,870
95,141,482
95,095,642
6,503,604
6,196,197
(95,133,795)
(92,436,969)
6,511,291
8,854,870
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2021 | Page 27
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
At 1 July 2020
95,095,642
6,196,197
(92,436,969)
8,854,870
Issued
capital
US$
Reserves
Accumulated
losses
US$
US$
Total
US$
Total comprehensive loss for the year
Loss for the year
Other comprehensive income
Transactions with owners in their capacity as owners
Issue of share capital, net of costs
Share based payments
At 30 June 2021
At 1 July 2019
-
-
-
45,840
-
-
-
-
-
307,407
45,840
307,407
(2,696,826)
(2,696,826)
-
-
(2,696,826)
(2,696,826)
-
-
-
45,840
307,407
353,247
95,141,482
6,503,604
(95,133,795)
6,511,291
91,686,061
6,116,687
(89,856,028)
7,946,720
Cumulative adjustments upon adoption of new accounting standard – AASB 16
-
-
(7,119)
(7,119)
Balance at 1 July 2019 (restated)
91,686,061
6,116,687
(89,863,147)
7,939,601
Total comprehensive loss for the year
Loss for the year
Other comprehensive income
Transactions with owners in their capacity as owners
Issue of share capital, net of costs
Share based payments
Foreign Exchange
-
-
-
3,409,581
-
-
3,409,581
-
-
-
-
50,700
28,810
79,510
(2,573,822)
(2,573,822)
-
-
(2,573,822)
(2,573,822)
-
-
-
-
3,409,581
50,700
28,810
3,489,091
At 30 June 2020
95,095,642
6,196,197
(92,436,969)
8,854,870
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2021 | Page 28
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Note
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs paid
2021
US$
2020
US$
250,000
-
(2,007,626)
(1,890,439)
-
-
10,246
-
Net cash outflow from operating activities
21
(1,757,626)
(1,880,193)
Cash Flows from Investing Activities
Payments for property, plant and equipment
Payments for exploration and evaluation
expenditure
Net cash outflow from investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
15
Payment of capital raising costs
Repayment of leases
Proceeds from borrowings
Net cash inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
7
Cash and cash equivalents at end of year
(307,081)
(53,145)
(99,456)
(165,647)
(406,537)
(218,792)
-
-
3,158,255
(239,933)
(168,047)
(166,983)
1,722,036
-
1,553,989
2,751,339
(610,174)
652,356
779,717
169,543
127,361
779,717
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2021 | Page 29
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 1: About this Report
(a) General information
The consolidated financial statements of Cokal Limited for the year ended 30 June 2021 were authorised for issue in
accordance with a resolution of the Directors dated 29 September 2021 and covers the consolidated entity (the “Group” or
“Cokal”) consisting of Cokal Limited (the “Company”) and its subsidiaries.
The financial statements are presented in United States Dollars (“US$” or “US$”).
Cokal Limited (the parent) is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly
traded on the Australian Securities Exchange.
The principal activities of the Group during the year were focused on the identification and development of coal within the
highly prospective Central Kalimantan coking coal basin in Indonesia.
(b) Basis of preparation
The financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards and the Corporations Act 2001.
The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
The financial statements have been prepared on a historical cost basis.
(c) Going concern
The financial report has been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and discharge of liabilities in the ordinary course of business.
For the year ended 30 June 2021 the Group recorded a loss of US$2,696,826 (30 June 2020: loss of US$2,573,822) and a net
cash outflow US$1,757,626 (30 June 2020: US$1,880,193).
As at 30 June, the Group’s arrears of trade and other payables means it’s ability to continue as a going concern is dependent
on creditors, including management and the directors, extending payment terms, providing informal financial support and not
demanding payment of amounts owed to them in excess of the Group’s available funds at the time. At the date of this report,
no creditor or lender of the Group have made demands for payment.
Should these avenues be delayed or fail to materialize, the Group has some ability to scale back its activities to help the Group
to manage to meet its debts as and when they fall due in the short term. However, should the above matters not be
successfully resolved, the Group may not be able to continue as a going concern.
A portion of the current liabilities are payable over time and from production. The Group has a commission payable of
US$9,261,535 based on an agreement with Alpine Invest Holdings Ltd. This amount is re-payable at the greater of US$10,000
per month and US$2.00 per tonne of coal sold by BBM and TBAR on a monthly basis. An amount of US$2 million payable to
BMA is also included in current liabilities and is to be repaid based on US$ 10 per tonne, if the coal price is greater than US$
110 per tonne, or 10 % of the coal price if less than US$ 110 per tonne.
Subsequent to year end, the Group concluded a binding commitment for a US$20m debt financing facility for development of
the Bumi Barito Mineral (BBM) Coking Coal Project with International Commodity Trade Ptd Ltd (“ICT”) on 14 July 2021. The
Group has received the first tranches totalling US$2 million of the debt facility from ICT on 20 July 2021. In addition, the group
completed a binding International Coal Marketing Agreement, also entered into with ICT, enabling BBM to market its coal to
the international market and assisting BBM in financing its coal stockpile at the river jetty. Under this arrangement, financing
of 80% of the coal value is received upon completion of the loading of coal to barges from the BBM Intermediate Stockpile
jetty (ISP).
The Directors are confident given the current progress towards mining at BBM that the Group will be successful in its
endeavours to develop the larger BBM project. The directors believe that the commencement of operations at the BBM
project (and the forecast generating of operating cash inflows) will enable it to satisfy its working capital requirements
(including its arrears of trade and other payables). This being the case, the directors have a reasonable expectation that the
Group’s creditors will continue to extend payment terms, provide informal financial support and not demand payment of
amounts owed to them in excess of the Group’s available funds. As a result, the financial report has been prepared on a going
concern basis.
COKAL LIMITED Annual Report 2021 | Page 30
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
(c) Going concern (Cont’d)
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities should the Group be unsuccessful in raising funds to enable it to
realise its assets and discharge its liabilities in the ordinary course of business.
(d) New accounting standards and interpretations
i.
ii.
Changes in accounting policy and disclosures
The Group has not early adopted other standard, interpretation or amendment that has been issued but is not yet
effective.
Accounting Standards and Interpretations issued but not yet effective
The Group has adopted all the mandatory new and amended Accounting Standards issued that are relevant to its
operations and effective for the current reporting period. There was no material impact on the financial report as a
result of the mandatory new and amended Accounting Standards adopted.
(e) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries at reporting date.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and
only if the Group has:
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
•
•
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangements with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the period are included in the statement of comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary;
• De-recognises the carrying amount of any non-controlling interests;
• De-recognises the cumulative translation differences recorded in equity;
•
•
•
•
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
COKAL LIMITED Annual Report 2021 | Page 31
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
(f) Critical accounting estimates and judgments
Details of critical accounting estimates and judgements about the future made by management at the end of the reporting
period are set out below:
(i) Impairment of non-financial assets
The Group assesses each reporting period to determine whether any indication of impairment exists. Where an indicator
of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the
fair value less costs of disposal (FVLCD) and value in use (VIU). The assessments require the use of estimates and
assumptions such as long term coal prices (considering current and historical prices, price trends and related factors),
discount rates, operating costs, future capital requirements and decommissioning operating performance (which includes
production and sales volumes). These estimates and assumptions are subject to risks and uncertainty. Therefore, there is
a possibility that changes in circumstances will impact this project, which may impact the recoverable amount of the asset.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The Group considers any third party offers when forming a view on fair
value, or Enterprise Value (EV) that the market participants willing to pay for acquisition of the Group’s shares.
(ii) Exploration and evaluation assets
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to
determine whether future economic benefits are likely, from either exploration or sale, or whether activities have not yet
reached a stage which permits a reasonable assessment of the existence of technically feasible and commercially viable
reserves. The determination of reserves and resources is itself and estimation process that requires varying degrees of
uncertainty depending on how the resources are classified. These estimates directly impact when the Group defers
exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and
assumptions about future events and circumstances, in particular, whether an economically viable extraction operation
can be established. Any such estimates and assumptions may change as new information becomes available. If, after
expenditure is capitalised, information becomes available suggesting that the recovery of the expenditure is unlikely, the
relevant capitalised amount is written off in profit or loss in the statement of comprehensive income in the period when
the new information becomes available.
At reporting date, certain tenements have reached a renewal date or will reach a renewal date in the next 12 months.
These tenements remain current until an official government expiry notice is issued. The directors are of the opinion that
while they are due for renewal, as no expiry notice has been received they remain current. If renewal is not forthcoming,
the amounts capitalised will likely be de-recognised.
(iii) Taxation
The Group’s accounting policy for taxation requires management’s judgement as to the types of arrangements considered
to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets
and certain deferred tax liabilities are recognised on the balance sheet.
Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are
recognised only where it is considered more likely than not that they will be recovered, which is dependent on the
generation of sufficient future taxable profits. Judgements are also required about the application of income tax
legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes
in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities
recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In
such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require
adjustment, resulting in a corresponding credit or change to the income statement.
(iv) Share-based payments
The Group uses estimates to determine the fair value of equity instruments issued to directors, executives, employees and
suppliers. Further detail of estimates used in determining the value of share-based payments is included in Note 22.
COKAL LIMITED Annual Report 2021 | Page 32
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
(f) Critical accounting estimates and judgments (Cont’d)
(v) Joint arrangement
Judgement is also required to classify a joint arrangement. Classifying the arrangement requires the Group to assess its
rights and obligations arising from the arrangement. Specifically, the Group considers:
The structure of the joint arrangement – whether its structured through a separate vehicle
•
• When the arrangement is structure through a separate vehicle, the Group also considers the rights and obligations
arising from:
-
The legal form of the separate vehicle;
-
The terms of the contractual arrangement; and
- Other facts and circumstances (when relevant).
This assessment often requires significant judgement, and a different conclusion on joint control and also whether the
arrangement is a joint operation or a joint venture, may materially impact the accounting.
Per agreement with subsidiary shareholders, the relevant activities including financing of certain entities’ are managed and
controlled by Cokal until the completion of Initial Work Program. The rights of other shareholders to receive returns and
obligations for expenditure are only established when they contribute their share of capital upon completion of the Initial
Work Program by Cokal. Given this, to date it has been determined that Cokal controls these entities and hence currently
consolidates them as subsidiaries. In future periods, however, the accounting treatment of these entities will be required to
be reassessed upon completion of Initial Work Program. This may lead to a change in accounting if it is then determined that
instead of controlling these entities, Cokal now only jointly controls these and they are joint arrangements. Depending on
whether these joint arrangements are classified as joint ventures or joint operations, this may require either equity accounting
(for a joint venture) or recognition of Cokal’s share of the assets, liabilities, income and expenses of the arrangement (for a
joint operation). Directors have not reassessed the impact at reporting date as the Initial Work Program has not been
completed at this date.
(g) Impairment of non-financial assets other than goodwill
At the end of each reporting period the Group assesses whether there is any indication that individual assets other than
goodwill, are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are
recognised in profit or loss where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher
of an asset's FVLCD and VIU. For the purpose of assessing VIU, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
Where it is not possible to estimate the recoverable amount for an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Assets other than goodwill that have previously been impaired are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.
(h) Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that that an outflow of economic resources will be required to settle the
obligation and the amount can be reliably estimated.
(i) GST
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services is
not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset
or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of receivables or payables in the statements of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
COKAL LIMITED Annual Report 2021 | Page 33
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
(j) Fair value measurement
The Group did not have any financial assets and liabilities measured at fair value at reporting date. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
•
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
(k) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.
An asset is current when it is either:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within 12 months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after
the reporting period.
All other assets are classified as non-current.
A liability is current when either:
• It is expected to be settled in the normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within 12 months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
COKAL LIMITED Annual Report 2021 | Page 34
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
(l) Other accounting policies
Oher accounting policies applied by the Group are disclosed in the following notes:
Note 2 Revenue and Other Income
Note 4 Income Tax
Note 6 Loss per Share
Note 7 Cash and Cash Equivalent
Note 9 Property, Plant and Equipment
Note 10 Exploration and Evaluation Assets
Note 12 Accounts Payable and Others
Note 13 Leases
Note 15 Issued Capital
Note 16 Reserves
Note 17 Parent Entity Information
Note 20 Operating Segments
Note 22 Share-based Payments
Note 24 Financial Risk Management
COKAL LIMITED Annual Report 2021 | Page 35
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 2: Revenue and Other Income
Other income
- Interest income from external parties
- Gain on discharge and release of trade payables
- Gain on discharge and release of loan
Total other income
2021
US$
3,394
-
-
3,394
2020
US$
10,246
74,022
9,261,535
9,345,803
On 29 April 2017, the Group entered into a Royalty Deed with Platinum Partners to convert all outstanding loans owing to
them to production royalties (this formalised the agreement on 22 July 2016) subject to certain conditions precedent. In
November 2018, the Company entered into a further agreement with Platinum Partners, the effect of which confirmed
Cokal’s satisfaction with a number of the conditions precedent to the Royalty Deed and extended the date for meeting all
of the remaining conditions precedent (the “Subsequent Conditions”) under the Royalty Deed for conversion of two-thirds
of the Platinum Loans (being $9,261,535). In addition, under the agreement when Cokal cancels and reissues 37.5 million
options to Platinum Partners, one-third of the Group’s debt with Platinum Partners, being $4,630,767, is discharged and
released. The cancellation and reissue of the 37.5 million options occurred on 10 January 2019, at which time one-third
of the debt was discharged and released and a corresponding gain recognised in the Group’s statement of profit or loss
and other comprehensive income. During May 2020 the Company consented to the assignment of the Platinum Partners
loan to Alpine Invest Holdings Ltd (Alpine). It was agreed as a term of the consent to the assignment that immediately
upon transfer of the Platinum Partners loans to Alpine, that the loans are deemed released and Alpine discharges and
releases Cokal and each Cokal Group Company from their liability to make payment of the Platinum Partners loans totalling
$9,261,535 on the following terms:
•
•
•
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be
payable through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed remain the same.
The Group previously recognised a share based payment expense for fair value (at grant date) of the 75 million options
granted to Platinum Partners as part consideration for the execution of the Royalty Deed. The Group recorded a further
share based payment expense of $1,003,561 in respect of the incremental fair value of the 37.5 million new options
granted to Platinum Partners as part of the November 2018 amendment to the Royalty Deed. This expense is reported
separately in the statement of profit or loss and other comprehensive income for the year ended June 2019.
Accounting Policy: Revenue Recognition
Interest income
Interest revenue is recognised as interest accrues using the effective interest rate method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the net carrying amount of the financial asset.
COKAL LIMITED Annual Report 2021 | Page 36
Notes to the Consolidated Financial
Statements for the year ended 30 June 2021
Note 3: Dividends and Franking Credits
There were no dividends paid or recommended during the financial year (30 June 2020: Nil).
There were no franking credits available to the shareholders of the Group (30 June 2020: Nil).
Note 4: Income Tax
The prima facie income tax on the loss is reconciled to the income tax expense as follows:
Prima facie tax benefit at 26% (2020: 27.5%) on
loss before income tax
Add tax effect of:
2021
US$
2020
US$
(701,175)
(707,801)
- Not deductible expenses and impact of tax
rate differences
- Deferred tax asset not recognised
Income tax expense
Deferred tax assets
Deductible temporary differences
Carry forward tax losses
Deferred tax liabilities
Assessable temporary differences
Net deferred tax assets not recognised
(414,090)
(707,801)
(287,085)
-
-
-
-
12,723,487
-
12,436,402
-
12,723,487
-
12,436,402
The carried forward tax losses and temporary differences not recognised as deferred tax assets as at 30 June 2021 were
U$48,936,488 (30 June 2020: US$45,223,281) and US$Nil (30 June 2020:US$Nil) respectively.
In order to recoup carried forward losses in future periods, either the Continuity of Ownership Test (COT) or Same
Business Test must be passed. The majority of losses are carried forward at 30 June 2021 under COT.
Deferred tax assets which have not been recognised as an asset, will only be obtained if:
(i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the losses to be
realised;
(ii) the Group continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Group in realising the losses
Accounting Policy: Income Tax
The income tax expense for the year is the tax payable on the current year's taxable income based on the national income
tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax
losses.
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets
are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each
jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if
they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
COKAL LIMITED Annual Report 2021 | Page 37
Notes to the Consolidated Financial
Statements for the year ended 30 June 2021
Note 4: Income tax (cont’d)
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of
investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of
the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income and equity are also
recognised directly in other comprehensive income and equity, respectively.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
profitable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Cokal Limited and its wholly-owned Australian subsidiaries have formed a tax consolidated group. Cokal Limited is the head
entity in the tax consolidated Group. The entities in the tax consolidated group will be taxed as a single entity and deferred
tax assets and liabilities will be offset in these consolidated financial statements.
Note 5: Auditor’s Remuneration
Audit services
Amounts paid/payable for audit or review of the
financial statements for the Group
Hall Chadwick
Note 6: Loss per Share
Loss attributable to owners of Cokal Limited used to calculate basic and
diluted loss per share (USD)
Options *
Weighted average number of ordinary shares used as the denominator in
calculating basic loss per share
Adjustments for calculation of diluted earnings per share:
-
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted loss per share
Basic loss per share (US cents per share)
Diluted loss per share (US cents per share)
2021
US$
102,700
102,700
2021
US$
2020
US$
100,000
100,000
2020
US$
(2,696,826)
(2,573,822)
924,582,313
911,138,073
924,582,313
911,138,073
(0.29)
(0.29)
(0.28)
(0.28)
* Options are considered anti-dilutive as the Group is loss making.
Options could potentially dilute earnings per share in the future. Refer to Note 15 for details of option granted as at 30 June 2021.
Accounting Policy: Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to owners of Cokal Limited by the weighted
average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares during the
period.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the amount used in determining basic
earnings per share by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The
weighted average number of shares used is adjusted for the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential ordinary shares.
COKAL LIMITED Annual Report 2021 | Page 38
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 7: Cash and Cash Equivalents
Cash and bank balances
Less: Short term deposits maturing after
three months and restricted bank balance
classified as investing activities**
Cash and cash equivalents
2021
US$
311,153
2020
US$
918,633
(141,610)
(138,916)
169,543
779,717
**Includes restricted deposits of US$141,610 (2020: US$138,916) which can be used only after TBAR production commences.
Accounting Policy: Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and at bank, deposits
held at call with financial institutions, other short term, highly liquid investments with maturities of three months or less,
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Note 8: Subsidiaries
a) Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in Note 1.
Name of entity
Jack Doolan Capital Pty Ltd
Cokal Mozambique Pty Ltd
Cokal Holdings Pte. Ltd
Cokal-AAK Pte. Ltd
Cokal-AAM Pte. Ltd
Cokal-BBM Pte. Ltd
Cokal-BBP Pte. Ltd
Cokal Services Pte. Ltd
Cokal Karoo Pte. Ltd
Cokal Manda Pte. Ltd
Cokal-West Kalimantan Pte. Ltd
Cokal-BPR Pte. Ltd
Cokal-TBAR Pte. Ltd
Mining Logistics Pte. Ltd
Cokal-KED Pte. Ltd
Cokal Resources Limited
PT Cokal
PT Bumi Kalimantan Logistik (BKL)
PT Anugerah Alam Katingan^ (AAK)
PT Bumi Barito Mineral^ (BBM)
PT Borneo Bara Prima ^ (BBP)
PT Tambang Benua Alam Raya# (TBAR)
Cokal Karoo Limited#
Cokal Manda Limited#
Country of
Incorporation
Class of Shares
Australia
Australia
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Tanzania
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Tanzania
Tanzania
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Percentage Owned
(%)*
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
60%
60%
75%
100%
100%
2019
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
60%
60%
75%
100%
100%
* the proportion of ownership interest is equal to the proportion of voting power held.
^ at reporting date, the capital of these companies represents only the contributions from Cokal. Per agreement, the right of non-controlling
shareholders’ receiving a return is established only when they contribute their share of capital upon completion of the Initial Work Programs for
each of the projects. At reporting date, the Initial Work Programs for these projects have not yet been completed and therefore there is no right to
a return for non-controlling interests.
# These entities are dormant entities. All capitalised expenditures for these entities has been impaired to $nil in prior periods. The fair value of the
underlying assets, liabilities and contingent liabilities at the acquisition date and 30 June 2021 are $nil.
COKAL LIMITED Annual Report 2021 | Page 39
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 8: Subsidiaries (cont’d)
b) Financial information of subsidiaries
Financial information of subsidiaries that will have material non-controlling interests are provided below. The balances of non-
controlling interests are not currently material at 30 June 2021 and 30 June 2020 as the right of non-controlling shareholders’
receiving a return is established only when they contribute their share of capital upon completion of the Initial Work Programs
for each of the projects. At reporting date, the Initial Work Programs for these projects have not yet been completed and
therefore there is no right to a return for non-controlling interests.
Note 9: Property, Plant and Equipment
Land
At cost
Computer equipment
At cost
Accumulated depreciation
Furniture and office equipment
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
Capital Works in Progress
At cost
Accumulated depreciation
Total property, plant and equipment
(a) Movements in carrying amounts
2021
Balance at 1 July 2020
Additions
Disposals
Depreciation expense
Amount written off
Carrying amount at the end year
2020
Balance at 1 July 2019
Additions
Disposals
Depreciation expense
Amount written off
Land
US$
63,493
125,646
-
-
-
189,139
Land
US$
31,526
31,967
-
-
-
Carrying amount at the end year
63,493
Computer
equipment
US$
9,512
29,987
-
(8,036)
-
31,463
Computer
equipment
US$
3,826
7,634
-
(1,948)
-
9,512
Furniture and
office
equipment
US$
35,179
7,750
-
(20,863)
-
22,066
Furniture and
office
equipment
US$
151,479
8,484
-
(124,785)
-
35,179
Motor
Vehicles
US$
4,157
4,318
-
(721)
-
7,754
Motor
Vehicles
US$
-
5,060
-
(900)
-
4,157
COKAL LIMITED Annual Report 2021 | Page 40
2021
US$
189,139
189,139
593,350
(561,887)
31,463
569,192
(547,126)
22,066
19,351
(11,597)
7,754
139,380
-
139,380
389,802
Capital
Works in
Progress
US$
-
139,380
-
-
-
139,380
Capital
Works in
Progress
US$
-
-
-
-
-
-
2020
US$
63,493
63,493
563,363
(553,851)
9,512
561,442
(526,263)
35,179
15,034
(10,877)
4,157
-
-
-
112,341
Total
US$
112,341
307,081
-
(29,620)
-
389,802
Total
US$
186,831
53,145
-
(127,633)
-
112,341
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 9: Property, Plant and Equipment (cont’d)
Accounting Policy: Property, plant and equipment
Property, plant and equipment are measured at cost less depreciation and impairment losses.
The cost of property, plant and equipment constructed within the Group includes the cost of materials, direct labour,
borrowing costs and an appropriate portion of fixed and variable costs.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to profit or loss during the period in which they are
incurred.
Depreciation
The depreciable amount of property, plant and equipment is depreciated over their useful life to the Group commencing from
the time the asset is held ready for use.
The depreciation rates used for each class of assets are:
Class of Fixed Assets
Land
Computer Equipment
Furniture and Office Equipment
Motor Vehicles
Depreciation Rate
nil
33.3% straight line
10 – 33.3% straight line
20% straight line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Gains and losses on disposal are determined by comparing proceeds with the carrying amount. The gains and losses are
included in the statement of comprehensive income.
Note 10: Exploration and Evaluation Assets
Non-Current
Exploration and evaluation expenditure capitalised
- exploration and evaluation phases
2021
US$
2020
US$
25,332,305
25,232,849
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development and commercial
exploitation of coal, or alternatively, sale of the respective areas of interest.
(a) Movements in carrying amounts
Balance at the beginning of the year
Site related expenses during the year
Carrying amount at the end of the year
25,232,849
99,456
25,332,305
25,067,202
165,647
25,232,849
Historically, the Group has determined the recoverable amount of the BBM project using the Fair Value Less Cost of Disposal (FVLCD)
methodology considering the Group as a single cash generating unit (consistent with the Group’s primary focus on the BBM project
and this being the only asset in respect of which E&E is carried forward). The FVLCD was determined using Enterprise Value (EV). EV
is implied by Cokal’s market capitalisation plus a control premium. The fair value measurement is categorised under Level 3 of the
fair value hierarchy (refer note 1 (j)).
At 30 June 2021, the Fair Value less Cost of Disposal (FVCLD) of the Group’s two areas of interest was measured with respect to the
Group’s market capitalisation. At that time, the Group’s market capitalisation exceeded the carrying amount of its net asset.
Given the presence of the two areas of interest, the FVLCD implied by the Group’s Enterprise Value did not provide a precise
evaluation of the FVLCD of the distinct areas of interest. This being the case, the Group also had reference to an Independent Study
of all of Cokal’s tenement interests prepared in accordance with the Valmin Code as at 30 June 2017 (released on 23 August 2017).
The Independent Study provided an estimate of value (in accordance with the Valmin Code) of BBM and TBAR. The Independent
Study estimated the value of BBM using a discounted cash flow method and assessed the value of TBAR with reference to a resource
COKAL LIMITED Annual Report 2021 | Page 41
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 10: Exploration and Evaluation Assets (cont’d)
multiple ($ per tonne of in-situ resource tonnes). The Valmin Code valuation is a proxy for FVLCD under AASB 136 and would be
categorised under Level 3 of the fair value hierarchy (refer note 1 (j)). Based on the combined impact of the EV assessment
and Independent Study the Group is satisfied no further impairment was required at 30 June 2021.
In addition, given the AASB 6 impairment indicator identified by the Group was associated with its intention and ability to spend
substantial amounts on the continued exploration and evaluation of the areas of interest, the Group’s continued funding issues (refer
accounting policy below) means there is no current indication previously recorded impairments in respect of both BBM and TBAR
should be reversed.
Accounting Policy: Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest.
Such expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a particular area of interest. The exploration and
evaluation expenditure is only carried forward as exploration or evaluation assets to the extent that they are expected to be
recouped through the successful development of the area or where activities in the area have not yet reached a stage which
permits reasonable assessment of the existence of economically recoverable reserves and active or significant operations in
relation to the area are continuing.
When technical feasibility and commercial viability of extracting a Coal Resource have been demonstrated then any capitalised
exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised
exploration and evaluation expense is assessed for impairment.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area are written off/de-
recognised in full against profit in the period in which the decision to abandon the area is made.
Costs related to the acquisition of properties that contain Coal Resources are allocated separately to specific areas of interest.
These costs are capitalised until the viability of the area of interest is determined.
The stripping costs (the process of over burden removal) incurred before production commences (development stripping) are
capitalised as part of mine development expenditure and subsequently amortised.
The stripping costs incurred subsequent to commencement of production are referred to as production stripping. Production
stripping is generally considered to create two benefits, being either the production of inventory or improved access to the
coal to be mined in the future. Where the benefits are realised in the form of inventory produced in the period, the production
stripping costs are accounted for as part of the cost of producing those inventories. Where the benefits are realised in the
form of improved access to ore to be mined in the future, the costs are recognised as a non-current asset, referred to as a
‘stripping activity asset’, if the following criteria are met:
a) Future economic benefits (being improved access to the ore body) are probable;
b) The component of the ore body for which access will be improved can be accurately identified; and
c) The costs associated with the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged to profit or loss as operating costs as they are
incurred. When production commences, the accumulated costs for the relevant area of interest (mine development and
acquired properties) will be amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves using a units of production method.
Mine rehabilitation costs will be incurred by the Group either while operating, or at the end of the operating life of, the Group’s
facilities and mine properties. The Group assesses its mine rehabilitation provision at each reporting date. The Group
recognises a rehabilitation provision where it has a legal and constructive obligation as a result of past events, and it is probable
that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can
be made. The nature of these restoration activities includes: dismantling and removing structures; rehabilitating mines and
tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and revegetating
affected areas.
The obligation generally arises when the asset is installed or the ground/environment is disturbed at the mining operation’s
location. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the
carrying amount of the related mining assets to the extent that it was incurred as a result of the development/construction of
the mine. Any rehabilitation obligations that arise through the production of inventory are recognised as part of the related
inventory item. Additional disturbances which arise due to further development /construction at the mine are recognised as
additions or charges to the corresponding assets and rehabilitation liability when they occur. Costs related to restoration of
COKAL LIMITED Annual Report 2021 | Page 42
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 10: Exploration and Evaluation Assets (cont’d)
site damage (subsequent to start of commercial production) that is created on an ongoing basis during production are
provided for at their net present values and recognised in profit or loss as extraction progresses.
Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by
recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the
initial estimate was originally recognised as part of an asset measured in accordance with AASB 116.
Any reduction in the rehabilitation liability and, therefore, any deduction from the asset to which it relates, may not exceed
the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to the statement of profit
or loss and other comprehensive income.
If the change in estimate results in an increase in the rehabilitation liability and, therefore, an addition to the carrying value
of the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for
impairment. If, for mature mines, the estimate for the revised mine assets net of rehabilitation provisions exceeds the
recoverable value, then that portion of the increase is charged directly to expense.
Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current
market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognised in the statement
of profit or loss and other comprehensive income as part of finance costs. For closed sites, changes to estimated costs are
recognised immediately in the statement of profit or loss and other comprehensive income.
The Group recognises neither the deferred tax asset in respect of the temporary difference on the decommissioning liability
nor the corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset.
Note 11: Other Assets
Current
Other receivable
Prepayments
Non-Current
Security deposits
2021
US$
10,117
170,565
180,682
2020
US$
10,117
94,758
104,875
25,724
25,280
COKAL LIMITED Annual Report 2021 | Page 43
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 12: Accounts Payable and Others
Current
Sundry payables and accrued expenses
Revenue in advance
Commission payable
Employee benefit
2021
US$
6,379,293
250,000
9,261,535
47,983
15,938,811
2020
US$
6,196,151
-
9,261,535
34,570
15,492,256
Revenue in advance
BBM has entered into an agreement with PT Slumber Global Energy (“SGE”) to monetise near-term coal production.
SGE will advance BBM a total of US$2.0M as consideration for Cokal appointing SGE as Exclusive Sales Agent for domestic
Indonesian coal sales whereby SGE will undertake the marketing and sales of 0.6Mt BBM coal sold into the Indonesian
domestic market for a period of 2 years from the date of first delivery of coal to SGE. US$250,000 was received to 30
June 2021.
BBM will repay the US$2.0M to SGE through a reduction in the coal sales price over the term of the agreement. The
repayment schedule to SGE will be calculated by apportioning the US$2.0M consideration over the total tonnage of coal
allocated to SGE over the term of the Agreement, which will be deducted from the sales price (e.g. If BBM allocates
0.6Mt of coal to SGE, then the US$2.0M in consideration will result in a US$3.33/t reduction in coal sales price for that
tonnage.) The reduction in coal sales price shall be adjusted in the final period of the Agreement to ensure full
repayment of the US$2.0M consideration.
Commission payable
Conversion of loans from Northrock and Wintercrest to royalties / commission payable
On July 2016, Cokal announced it had reached an agreement with Platinum Partners for the conversion of all outstanding
loans owing under the Wintercrest and Norfolk facilities to production royalties. The royalties will be payable on 1% of the
realised selling price of coal (FOB) from the Bumi Barito Mineral Project (BBM) and PT Tambang Benua Alam Raya (TBAR)
projects up to a maximum of US$40 million. Under the arrangement, no minimum royalty is payable and the royalty is only
payable as and when coal is mined and sold.
On 29 April 2017, the Group entered into a Royalty Deed with Wintercrest and Northrock (collectively the “Lenders”) to
convert all outstanding loans owing to them to production royalties. The Royalty Deed is subject to a number of substantive
conditions precedent. The conditions precedent include:
a) The completion of legal and commercial due diligence by the Lenders’;
b) Approval by Cokal’s shareholders;
c) The Lenders being provided security in the form of a first legal charge under a deed of charge, over all of Cokal’s interest in the
BBM and TBAR projects, in a form reasonably satisfactory to the Lenders, to protect the interest of the Lenders in the royalties;
d) Cokal evidencing to the satisfaction of the Lenders (in their sole discretion) it has completed a capital raising (debt, equity or a
combination) to support the production of at least 100 ktpa of coal;
e) Cokal evidencing to the satisfaction of the Lenders (in their sole discretion) that:
i. Cokal’s production is not less than 8500 tonnes per month for a period of six (6) consecutive months;
ii. Cokal’s production for three (3) months from the date of first production is not less than the monthly equivalent of
100ktpa;
provided the above three and six month period occur with 18 months of the Group satisfying the condition in (d) above; and
f) The Lenders have received and approved all financial budgets anticipated to meet the production targets in (d) and (e) above.
On 20 February 2018, the Company issued 75 million Options to the Platinum Entities with an expiry date of 20 February 2023
and an exercise price of 1.6 cents (Existing Platinum Options). Each Existing Platinum Option vested once all the Platinum
Loans were released and discharged.
In November 2018, Cokal concluded and executed an amended agreement with Northrock Financial LLC and Wintercrest
Advisors LLC (the Platinum Entities) in respect of loans outstanding totalling US$13.89 million (Platinum Loans). The agreement
confirmed Cokal’s satisfaction with or waiver of the conditions precedent (a) to (d) above and extended the date for meeting
all of the remaining conditions precedent, being (e) and (f) (the “Subsequent Conditions”) under the Royalty Deed for
COKAL LIMITED Annual Report 2021 | Page 44
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 12: Accounts Payable and Others (cont’d)
conversion of two thirds of the Platinum Loans to 31 July 2020. In addition, the amended agreement provided that when Cokal
cancels and reissues 37.5 million options to Platinum Partners, one third of the of the Group’s debt with Platinum Partners is
discharged and released. The cancellation and reissue of the 37.5 million options occurred on 10 January 2019, at which time
one third of the debt was discharged and released.
During May 2020 the Company consented to the assignment of the Platinum Loans to Alpine Invest Holdings Ltd (Alpine). It
was agreed as a term of the consent to the assignment that immediately upon transfer of the Platinum Loans to Alpine, that
the loans are deemed released and Alpine discharges and releases Cokal and each Cokal Group Company from their liability
to make payment of the Platinum Loans totalling $9,261,535 on the following terms:
•
•
•
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be
payable through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed shall remain the same.
The fair value of the commission payable to Alpine has been determined using the extinguished value of borrowings with
Platinum Partners, taking into consideration the performance risk associated with future production levels.
Accounting Policy: Employee Benefits
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the end of the reporting period are recognised in respect of employees' services rendered up to
the end of the reporting period and are measured at amounts expected to be paid when the liabilities are settled. Liabilities
for non-accumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable. In
determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy
vesting requirements.
Note 13: Leases
a) Right of use assets – buildings and motor vehicles
Balance at beginning of year
Additional leases during the year
Amortisation
Balance at end of year
b) Lease liabilities
Current
Non current
30 June
2021
US$
141,725
157,727
(132,653)
166,799
61,857
37,956
99,813
30 June
2020
US$
213,041
56,952
(128,268)
141,725
102,479
7,650
110,129
COKAL LIMITED Annual Report 2021 | Page 45
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 13: Leases (cont’d)
Accounting Policy: Leases
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-use
asset and a corresponding lease liability is recognised by the Group where the Group is a lessee. However, all contracts that
are classified as short-term leases (ie a lease with a remaining lease term of 12 months or less) and leases of low-value assets
are recognised as an operating expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at commencement date. The
lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group
uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
•
•
•
•
•
•
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the
lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above, any lease payments
made at or before the commencement date, as well as any initial direct costs. The subsequent measurement of the right-of-use
assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest. Where a lease
transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group anticipates to exercise a
purchase option, the specific asset is depreciated over the useful life of the underlying asset.
Note 14: Borrowings
Current
BMA Group loan
Loans payable to directors #
Loans payable – non interest bearing
Loans payable – interest bearing
Total Borrowings
2021
US$
2,000,000
74,065
276,419
1,506,066
3,856,550
2020
US$
2,000,000
78,448
-
-
2,078,448
# These loans payable to directors are non-interest bearing and repayable on demand.
BMA Group loan
On 21 September 2018, Cokal signed a Key Principles of Agreement with PT Bara Mineral Asri (BMA Group) to develop and
operate PCI and Coking Coal operations at the BBM Project. Cokal received US$2.0 million loan from BMA Group to secure the
transaction but the BMA Group failed to complete the other funding conditions set out in the Key Principles of Agreement and
has also failed to document the loan arrangement with the Group. Therefore, the Group has assessed the loan is repayable
on demand and has been disclosed at the face value of the amounts received. It has been agreed that the liability will be
repaid based on US$ 10 per tonne, if the coal price is greater than US$ 110 per tonne, or 10 % of the coal price if less than US$
110 per tonne.
COKAL LIMITED Annual Report 2021 | Page 46
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 14: Borrowings (cont’d)
Loans payable – interest bearing
Loan payable – interest bearing is comprised of Aahana Mineral Resources Loan Facility amount totalling US$745,323
(including accrued interest) and Alpine Invest Holding Ltd Loan Facility amount totalling US$760,743 (including accrued
interest). These two loans total US$1,506,066.
Aahana Mineral Resources Loan Facility
During the year the loan facility provided by Aahana Minerals Resources SDN BHD was terminated and replaced by a new loan
facility with an increased facility amount of US$800,000. The facility interest rate is 12% per annum, compounded monthly
and payable on the funds drawn down. US$700,000 has been drawn under the facility with accrued interest of US$45,323 as
at 30 June 2021. The loan is repayable within 30 days of receipt of a written demand for repayment by the Lender. Cokal
Limited has provided a corporate guarantee for payment the Loan.
Alpine Invest Holding Ltd Loan Facility
During the year a loan facility was provided by Alpine Invest Holding Ltd totalling US$750,000. The facility interest rate is 12%
per annum, compounded monthly and payable on the funds drawn down. US$750,000 has been drawn under the facility with
accrued interest of US$10,743 as at 30 June 2021.
Note 15: Issued Capital
(a) Ordinary shares
924,582,313 fully paid ordinary shares (30 June
2020: 923,382,313)
Movement in Issued Capital
At the beginning of the year
Shares issued in lieu of consulting services during the
year
Share issue from capital raising, net of costs
Share issue on payment of creditors
At reporting date
Movement in Issue Capital
(a) Ordinary shares
At the beginning of the year
Shares issued during the year
Share issue from capital raising
Shares issued in lieu of consulting services during the
year
Share issue on payment of creditors
At reporting date
-
-
2021
US$
2020
US$
95,141,482
95,095,642
2021
US$
95,095,642
45,840
-
-
95,141,482
2021
Number
2020
US$
91,686,061
-
2,918,322
491,259
95,095,642
2020
Number
932,382,313
816,842,159
-
94,812,055
1,200,000
-
924,582,313
-
11,728,099
923,382,313
COKAL LIMITED Annual Report 2021 | Page 47
Notes to the Consolidated Financial
Statements for the year ended 30 June 2021
Note 15: Issued Capital (cont’d)
(b) Options
All options on issue at 30 June 2021 were as follows:
Number of options
Exercise price
US$
Expiry date
Employees*:
Consultant
3,000,000
3,000,000
3,000,000
5,000,000
1,000,000
15,000,000
Platinum / Northrock**
37,500,000
Aahana Mineral Resources SDN
37,500,000
105,000,000
0.03
0.04
0.05
0.07
0.03
0.05
0.01
0.01
20 December 2021
20 December 2021
20 December 2021
20 December 2021
20 December 2021
17 August 2023
20 February 2023
20 February 2023
*As at 30 June 2021, these options have not vested
** As part of the Company’s debt restructure, it was agreed that these 37.5 million options will not be exercised
Included in the above Option schedule are performance securities as follows:
Remun-
eration
type
Grant date
Vesting
date
Number
Exercise
Price
US$
Grant
value
(per
option)
US$
Percentage
vested /
paid during
year
Percentage
forfeited/
cancelled
during year
Percentage
remaining
as
unvested
%
%
%
Expiry date
Consolidated entity KMP
James
Coleman
James
Coleman
James
Coleman
James
Coleman
Options
20/12/2018
Note 1 3,000,000
0.03
0.01
Options
Options
Options
20/12/2018
20/12/2018
20/12/2018
Note 2 3,000,000
0.04
0.01
Note 3 3,000,000
0.05
0.01
Note 4 5,000,000
0.07
0.01
-
-
-
-
-
-
-
-
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
Total
Note 1: vesting on achieving a consistent production rate for three months of 20,000 tonnes of coal per month
Note 2: vesting on achieving a consistent production rate for three months of 40,000 tonnes of coal per month
Note 3: vesting upon commencement of shallow river barging
Note 4: vesting upon first shipment of coking coal from BBM
14,000,000
No performance securities were converted or cancelled during the year.
(c) Capital Risk Management
Management controls the capital of the Group in order to provide capital growth to shareholders and ensure the Group can
fund its operations and continue as a going concern.
The Group capital comprises equity as shown in the Statement of Financial Position. There are no externally imposed capital
requirements other than shown in note 15.
Management effectively manages the Group capital by assessing the Group financial risks and adjusting its capital structure in
response to changes in these risks and the market. These responses include raising sufficient equity capital when required.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
Accounting Policy: Issued capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are shown as a
deduction from the equity proceeds, net of any income tax benefit.
COKAL LIMITED Annual Report 2021 | Page 48
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 16: Reserves
Share based payments option reserve
Opening balance
Movement
Closing balance
Translation reserve
2021
US$
7,622,839
307,407
7,930,246
(1,426,642)
6,503,604
2020
US$
7,752,139
50,700
7,622,839
(1,426,642)
6,196,197
The option reserve records the value of options issued as part of capital raisings, and consultant services as well as expenses relating
to director, executive and employee share options.
During the year ended 30 June 2021, $307,407 was recorded in respect of broker options issued during the year.
During the year ended 30 June 2020 proportional expensing of options issued to the CEO, Mr James Coleman in December 2018 was
recorded, totalling US $50,700. These options are as follows:
•
•
•
•
3,000,000 options with an exercise price of US$0.03 and expiry date of 20 December 2021, vesting on production of
20,000 tonnes per month of coal (including PCI) for three consecutive months;
3,000,000 options with an exercise price of US $0.04 and expiry date of 20 December 2021, vesting on production of
40,000 tonnes per month of coal (including PCI) for three consecutive months;
3,000,000 options with an exercise price of US $0.05 and expiry date of 20 December 2021, vesting upon
commencement of shallow river barging; and
5,000,000 options with an exercise price of US$0.07 and expiry date of 20 December 2021, vesting upon first shipment
of coking coal from BBM.
Translation reserve represents the net exchange differences arising from the translation as a result of change in presentation
currency to US$ from AU$ and translation of the AUD entity to USD.
Accounting Policy: Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. The resulted gain or loss on retranslation is included in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
COKAL LIMITED Annual Report 2021 | Page 49
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 17: Parent Entity Information
The consolidated financial statements incorporate the assets, liabilities and results of the parent entity in accordance with
the accounting policy described in Note 1.
Parent Entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Share based payment reserves
Currency translation reserve
Accumulated losses
Total shareholder’s equity
Loss for the year
Total comprehensive loss for the year
2021
US$
69,403
14,513,135
14,582,538
6,228,824
8,365
6,237,189
8,345,349
95,141,482
7,930,246
(3,517,011)
(91,209,368)
8,345,349
(847,347)
(847,347)
2020
US$
216,607
20,086,511
20,303,118
11,440,451
43,696
11,484,147
8,818,971
95,095,642
7,622,839
(3,537,489)
(90,362,021)
8,818,971
(2,240,710)
(2,240,710)
Guarantees
The parent entity has set up wholly owned special purpose entities (SPEs) in Singapore to hold ownership interests in
Indonesia and provided an undertaking to financially support SPEs to meet their liabilities as and when they fall due.
Contractual Commitments
There were no contractual commitments for the acquisition of property, plant and equipment entered into by the parent
entity at 30 June 2021 (2020 – nil).
Contingent liabilities
The parent entity has no contingent liabilities.
Capital commitments
The parent entity has no capital commitments.
Impairment assessment
At 30 June 2021, Cokal Limited, the parent entity, performed an impairment assessment of its investments in subsidiaries
and non-current receivables from subsidiaries. As a result of this assessment, the carrying amount of these assets was
impaired by US$Nil (2020: US$1,500,000).
Accounting Policy: Parent entity financial information
The financial information for the parent entity, Cokal Limited, included in this Note 17, has been prepared on the same
basis as the consolidated financial statements, except investments in subsidiaries and joint venture operations are
accounted for at cost, less provision for impairment.
COKAL LIMITED Annual Report 2021 | Page 50
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 18: Commitments
There are no commitments for the financial year of 2021 and 2020.
Note 19: Contingent Liabilities
The Group has a number of contingent liabilities in respect of deferred purchase consideration for the acquisition of its
mining and exploration tenements.
BBP Vendor Payment
At 30 June 2020, the Group’s contingent liabilities include US$7.95m (30 June 2019: US$7.95m) in respect of its PT Borneo
Bara Prima (BBP) tenement. The amount is payable on the achievement of certain milestones, including but not limited to
the establishment of certain JORC Inferred Coal Resources and the issuance of production operation IUPs (licences) and
production forestry permits.
BBM Vendor Payment
As part of the Group’s acquisition of its interest in the BBM project, it was agreed an amount of US$10.0 million would be
payable within 30 days of the issue of the Production/ Operations IUP (mining license granted under the Indonesian New
Mining Law). During the year the Company entered into an agreement with the vendor of BBM for these vendor payments
due on commencement of production. It has now been agreed that an amount of US$10.5 million will be paid via:
1. US$200,000 within 30 days of signing the agreement;
2. During the first and second year of coal sales to a third party, monthly at a rate of US$2 per tonne of coal sold;
3. From the third year of coal sales to a third party, monthly at a rate of US$3 per tonne of coal sold.
Payments under items 2 and 3 are to total US$10.3 million.
BMA Group loan
On 21 September 2018, Cokal signed a Key Principles of Agreement with PT Bara Mineral Asri (BMA Group) to develop and
operate PCI and Coking Coal operations at the BBM Project. Cokal received US$2.0 million loan from BMA Group to secure
the transaction but the BMA Group failed to complete the other funding conditions set out in the Key Principles of
Agreement and has also failed to document the loan arrangement with the Group. Therefore, the Group has assessed the
loan is repayable on demand and has been disclosed at the face value of the amounts received. It has been agreed that the
liability will be repaid based on US$ 10 per tonne, if the coal price is greater than US$ 110 per tonne, or 10 % of the coal
price if less than US$ 110 per tonne.
Alpine Invest Holdings Ltd Commitment
During May 2020 the Company consented to the assignment of the Platinum Loans to Alpine Invest Holdings Ltd (Alpine). It
was agreed as a term of the consent to the assignment that immediately upon transfer of the Platinum Loans to Alpine, that
the loans are deemed released and Alpine discharges and releases Cokal and each Cokal Group Company from their liability
to make payment of the Platinum Loans totalling $9,261,535 on the following terms:
•
•
•
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be
payable through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed shall remain the same.
Aahana Mineral Resources Loan Facility
Cokal Limited has provided a corporate guarantee for payment the loan facility. The balance of the loan is US$745,323
including interest as at 30 June 2021.
COKAL LIMITED Annual Report 2021 | Page 51
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 20: Operating Segments
Segment performance for the year ended 30 June 2021
Australia
US$
Indonesia
Singapore
US$
US$
Total
US$
Other income
Total segment income
Depreciation expenses
Amortisation expenses
Finance costs
Share based payments
Other expenses
Total segment expenses
-
-
5,198
42,669
248
307,407
424,559
780,081
3,346
3,346
24,422
89,984
-
-
1,612,566
1,726,972
48
48
-
-
56,066
-
137,101
193,167
3,394
3,394
29,620
132,653
56,314
307,407
2,174,226
2,700,220
Segment net profit /(loss) before tax
(780,081)
(1,723,626)
(193,119)
(2,696,826)
Segment assets and liabilities as at 30 June 2021
Property, plant and equipment
Exploration and evaluation assets
Other segment assets
Total segment assets
12,531
-
40,785
53,316
377,271
25,332,305
587,071
26,296,647
-
-
56,502
56,502
389,802
25,332,305
684,358
26,406,465
Total segment liabilities
10,178,937
8,214,047
1,502,190
19,895,174
Capital expenditure for the year ended 30 June 2021
Property, plant and equipment
Exploration and evaluation assets
29,987
-
277,094
99,456
-
-
307,081
99,456
COKAL LIMITED Annual Report 2021 | Page 52
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 20: Operating Segments (cont’d)
Segment performance for the year ended 30 June 2020
Australia
US$
Indonesia
Singapore
US$
US$
Total
US$
Other income
Interest revenue
Total segment income
Depreciation expenses
Amortisation expenses
Finance costs
Share based payments
Other expenses
Total segment expenses
9,335,557
7
9,335,564
36,855
9,240
46,276
50,700
7,633,007
7,776,076
-
49
49
90,778
119,028
(22,520)
-
1,956,261
2,143,547
-
10,190
10,190
-
-
-
-
-
-
9,335,557
10,246
9,345,803
127,633
128,268
23,756
50,700
9,589,268
9,919,625
Segment net profit /(loss) before tax
(440,514)
(2,143,498)
10,190
(2,573,822)
Segment assets and liabilities as at 30 June 2020
Property, plant and equipment
Exploration and evaluation assets
Other segment assets
Total segment assets
-
-
47,066
47,066
112,341
25,232,849
525,987
25,871,177
-
-
617,460
617,460
112,341
25,232,849
1,190,513
26,535,703
Total segment liabilities
10,358,624
7,300,174
22,035
17,680,833
Capital expenditure for the year ended 30 June 2020
Property, plant and equipment
Exploration and evaluation assets
-
-
53,143
165,647
-
-
53,143
165,647
*Inter segment expense relating to the income is eliminated in Indonesia’s exploration and evaluation assets.
Accounting Policy: Determination and presentation of operating segments
AASB 8 Operating segments requires a management approach under which segment information is presented on the same
basis as that used for internal reporting purposes. Operating segments are reported in a manner that is consistent with the
internal reporting to the chief operating decision maker (CODM), which has been identified as the Board of Directors.
Operating segments that meet the qualification criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the qualification criteria is still reported separately when information about the
segment would be useful to users of the financial statements.
COKAL LIMITED Annual Report 2021 | Page 53
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 21: Cashflow Information
(a) Reconciliation of loss after income tax to net cash flow used in operating activities
Note
2021
US$
2020
US$
Loss for the year
Non-cash items:
- Depreciation
- Amortisation
- Share options expensed **
- Share issues in lieu of payment of
expenses **
- Gain on loan forgiveness
- Foreign exchange movement
Change in operating assets and liabilities:
- (Increase)/Decrease in accounts receivables
- Increase in other current assets
- Decrease in other non-current assets
- Increase in revenue in advance
- Increase in accounts payables
- Increase in accrued interest on borrowings
Net cash flow used in operating activities
9
13
22(b)
15
2 & 12
(2,696,826)
(2,573,822)
29,620
132,653
307,407
45,840
127,633
128,268
50,700
-
-
(9,261,535)
(2,692)
28,810
-
(75,808)
(444)
250,000
196,554
56,070
(8,015)
(77,288)
12,868
-
9,692,188
-
(1,757,626)
(1,880,193)
** The Company issued shares and options in payment of the following (refer notes 15 and 22):
Share options expensed:
- Options issued to Consultant US$307,407 (2020:US$Nil);
- Options issued as a bonus to the CEO US$NIL (2020: US$ 50,700); and
Share issues in payment of expenses:
- Shares issued in payment of corporate advisory fee: US$45,840 (2020: US$Nil);
COKAL LIMITED Annual Report 2021 | Page 54
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 22: Share-based Payments
The following share-based payment arrangements existed at 30 June 2021.
(a) Share-based payments to directors, executives, employees and suppliers
During the year ended 30 June 2021, Nil options were issued to directors and Nil options were issued to executives and
employees of the Group.
During the year ended 30 June 2021, 15,000,000 options were issued to consultants of the Group.
At 30 June 2021, there were 105,000,000 unissued ordinary shares under options as follows:
•
•
•
•
•
•
•
75,000,000 unlisted options exercisable at AU$0.016 on or before 16 February 2023 (vesting on all Platinum Loans
being released and discharged under the Debt Restructure Transaction). As part of the debt restructure, it was agreed
that 37.5 million of these options will not be exercised
1,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021
3,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021 (vesting upon production of
20,000 tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.055 on or before 20 December 2021 (vesting upon production of
40,000 tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.07 on or before 20 December 2021 (vesting upon commencement of
shallow river barging)
5,000,000 unlisted options exercisable at AU$0.10 on or before 20 December 2021 (vesting upon first shipment of
coking coal from BBM)
15,000,000 unlisted options exercisable at AU$0.05 on or before 17 August 2023
No option holder has any right under the options to participate in any other share issue of Cokal Limited or any other entity.
Subsequent to year end, 12,500,000 ordinary shares in Cokal Limited were issued as a result of the exercise of options.
All options issued by Cokal Limited entitle the holder to one ordinary share in Cokal Limited for each option exercised. The
options were granted for nil consideration. Once vested, options can be exercised at any time up to the expiry date.
The range of exercise prices for options outstanding at 30 June 2021 was US$0.01 to US$0.07 (2020: US$0.01 to US$0.10)
and weighted average remaining contractual life of 2.39 years (30 June 2020: 2.31 years).
Outstanding at beginning of period
Granted
Forfeited/Cancelled
Exercised
Expired
Outstanding at period-end
Exercisable at period-end
30 June 2021
No. of options Weighted average
No. of options
exercise price
30 June 2020
Weighted average
exercise price
96,000,000
15,000,000
-
-
6,000,000
105,000,000
53,500,000
US$
0.02
0.05
-
-
0.09
0.02
0.02
96,000,000
-
-
-
-
96,000,000
39,500,000
US$
0.02
-
-
-
-
0.02
0.01
Shares issued on exercise of an option rank equally with all other ordinary shares then on issue. The value of the 15,000,000
options granted during the year recorded in the accounts was $307,407 as set out below.
COKAL LIMITED Annual Report 2021 | Page 55
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 22: Share-based Payments (cont’d)
(b) Recognised share based payment expenses
Expense arising from options issued in payment of consulting
fees
Expense recognised over vesting period for options issued as
bonus
Accounting Policy: Share-based payment
2021
US$
Effect on
Statement of
Comprehensive
Income
Effect on
Option
Reserve
Effect on
Option
Reserve
307,407
307,407
-
2020
US$
Effect on
Statement of
Comprehensive
Income
-
-
-
50,700
50,700
307,407
307,407
50,700
50,700
The Group provides benefits to employees (including directors) and suppliers (including financiers and consultants) in
the form of share-based payment transactions, whereby employees or suppliers render/provide services in exchange
for shares or options over shares (equity-settled transactions).
The fair value of options granted to employees is recognised as an employee benefit expense with a corresponding
increase in equity (share-based payment option reserve). The fair value of options granted to financiers is recognised as
finance cost with a corresponding increase in equity (share-based payment option reserve). Fair value of shares issued
to employees and consultants are recognised as employee benefits and consultancy expenses respectively with a
corresponding increase in share capital. The fair value is measured at grant date and recognised over the period during
which the employees/suppliers become unconditionally entitled to the options. Fair value is determined by an
independent valuer using a Black-Scholes option pricing model. In determining fair value, no account is taken of any
performance conditions other than those related to the share price of Cokal Limited (market conditions).
The cumulative expense recognised between grant date and vesting date is adjusted to reflect the directors’ best
estimate of the number of options that will ultimately vest because of internal conditions of the options, such as the
employees having to remain with the Group until vesting date, or such that employees are required to meet internal
performance targets. There are no conditions associated with the options issued to the financiers. No expense is
recognised for options that do not ultimately vest because internal conditions were not met. An expense is still
recognised for options that do not ultimately vest because a market condition was not met.
At each subsequent reporting date until vesting the cumulative charge to the statement of comprehensive income is
the product of:
- The grant date fair value of the award;
- The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of
employees turnover during the vesting period and the likelihood of non-market performance conditions being met; and
- The expired portion of the vesting period.
The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less
the amounts already charged in previous periods. There is a corresponding entry to equity.
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if
the terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any
increase in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are
taken immediately to profit or loss. However, if new options are substituted for the cancelled options and designated
as a replacement on grant date, the combined impact of the cancellation and replacement options are treated as if they
were a modification.
The dilution effect, if any, of outstanding options is reflected as additional share dilutions in the computation of diluted
earnings per share.
COKAL LIMITED Annual Report 2021 | Page 56
Notes to the Consolidated Financial
Statements for the year ended 30 June 2021
Note 23: Related Party Disclosure
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
(a) Parent entity
The parent entity and ultimate controlling entity is Cokal Limited, which is incorporated in Australia.
(b) Subsidiaries
Interests and transactions in subsidiaries are disclosed in Note 8.
(c) Key management personnel (KMP) compensation
The KMP compensation for the year ended are set out below:
Short-term employee benefits*
Post-employment benefits
Termination benefits
Share-based payments
2021
US$
335,624
4,809
-
-
340,433
2020
US$
349,481
4,768
-
55,700
409,949
Note 24: Financial Risk Management
(a) General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This
note describes the Group objectives, policies and processes for managing those risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated
in this note. The Group’s financial instruments consist mainly of deposits with banks, accounts receivable, security deposits,
interest bearing loans and accounts payable.
The Board has overall responsibility for the determination of the Group’s financial risk management objectives and policies
and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Group’s
financial risk management policies and objectives are therefore designed to minimise the potential impacts of these risks
on the results of the Group where such impacts may be material.
The overall objective of the Board is to set policies that seek to reduce financial risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out below.
(b) Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the
Group incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to the Group. The
Group’s objective is to minimise the risk of loss from credit risk exposure.
The Group’s maximum exposure to credit risk at the end of the reporting period, without taking into account the value of
any collateral or other security, in the event other parties fail to perform their obligations under financial instruments in
relation to each class of recognised financial asset at reporting date, is as follows:
Cash and bank balances
Receivables
Security deposits
Total
Note
7
11
7
2021
US$
169,543
10,117
141,610
321,270
2020
US$
779,717
10,117
138,916
928,750
COKAL LIMITED Annual Report 2021 | Page 57
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 24: Financial Risk Management (cont’d)
(b) Credit Risk (cont’d)
The Group does not have any material credit risk exposure to any single debtor or Group of debtors under financial instruments
entered into by the Group. No receivables balances were past due or impaired at period end. The credit quality of receivables
that are neither past due nor impaired is good.
(c) Liquidity Risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meets its liabilities when they fall due, under both normal and stressed conditions
Liquidity risk is reviewed regularly by the Board and the Audit Committee. Regular financial updates are received by the Board,
including financial forecasts of expenditure. The Board maintains a standing item in its Board meetings relating to the Group’s
funding with discussion and updates of various options and progression of funding provided regularly.
Carrying
Amount
US$
Contractual
Cash flows
US$
<6 months
6 – 12 months
1 – 3 years
>3 years
US$
US$
US$
US$
MATURITY ANALYSIS– 30 June 2021
Financial Liabilities
-
-
-
-
-
-
-
-
-
Accounts payable
Leases
Borrowings
Revenue in advance
Total
15,688,811
99,813
3,856,550
250,000
19,895,174
15,688,811
99,813
3,856,550
250,000
19,895,874
6,427,276
39,015
1,818,550
-
8,284,841
9,261,535
22,842
2,038,000
250,000
11,572,377
-
37,956
-
-
37,956
Carrying Amount
US$
Contractual
Cash flows
US$
<6 months
6 – 12 months
1 – 3 years
>3 years
US$
US$
US$
US$
MATURITY ANALYSIS– 30 June 2020
Financial Liabilities
Accounts payable
15,492,256
15,492,256
6,230,721
Leases
Borrowings
Total
(d) Market Risk
110,129
2,078,448
17,680,833
110,129
2,078,448
17,680,833
59,036
78,448
6,368,205
9,261,535
43,443
2,000,000
11,304,978
-
7,650
-
7,650
-
-
-
-
-
-
-
-
-
-
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is the risk that
the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest
rate risk), foreign exchange rates (currency risk) or other market factors (other price risk). The entity does not have any
material exposure to market risk other than as set out below.
(i) Interest rate risk
Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk management is to
manage and control interest rate risk exposures within acceptable parameters while optimising the return.
Interest rate risk is managed with fixed rate debt. For further details on interest rate risk refer to the tables below:
COKAL LIMITED Annual Report 2021 | Page 58
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 24: Financial Risk Management (cont’d)
(i) Interest rate risk (cont’d)
2021
Interest bearing -
floating interest
rate
Interest bearing - fixed
interest rate
Non-interest
bearing
Total carrying
amount
Financial assets
Cash and bank balances
Receivables
Security deposits
Total financial assets
Financial liabilities
Accounts payable
Leases
Borrowings
Total financial liabilities
US$
169,543
-
-
169,543
-
-
-
-
US$
US$
US$
-
-
-
-
-
99,813
1,506,066
1,605,879
-
10,117
141,610
151,727
15,938,811
-
2,350,484
18,289,295
169,543
10,117
141,610
321,270
15,938,811
99,813
3,856,550
19,895,174
2020
Floating interest
rate
Fixed interest rate
Non-interest
bearing
Total carrying
amount
Weighted
average
effective
interest rate
%
-
-
-
-
-
12%
-
Weighted
average
effective
interest rate
Financial assets
Cash and bank balances
Receivables
Security deposits
Total financial assets
Financial liabilities
Accounts payable
Leases
Borrowings
Total financial liabilities
US$
779,717
-
-
779,717
-
-
-
-
US$
US$
US$
%
-
-
-
-
-
110,129
-
110,129
-
10,117
138,916
149,033
15,492,256
-
2,078,448
17,570,704
779,717
10,117
138,916
228,750
15,492,256
110,129
2,078,448
17,680,833
-
-
-
-
-
-
-
-
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk. This sensitivity demonstrates
the effect on the current period results and equity which could result from a change in these risks.
The effect on post tax profit and equity as a result of changes in the interest rate for floating interest rate instruments, with
all other variables held constant, would be as follows:
2021
Cash and cash equivalents
Total effect on post tax profit
2020
Cash and cash equivalents
Total effect on post tax profit
Carrying Amount
(interest bearing)
US$
Increase in interest rate
by 0.5%
US$
Decrease in interest
rate by 0.5%
US$
169,543
218,633
848
848
1,093
1,093
(848)
(848)
(1,093)
(1,093)
(ii) Currency risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due
to movement in foreign exchange rates of currencies in which the Group hold financial instruments which are other than
the US$ functional currency of the Group.
COKAL LIMITED Annual Report 2021 | Page 59
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 24: Financial Risk Management (cont’d)
(ii) Currency risk (cont’d)
The Group is exposed to currency risk on its cash and cash equivalents held (in AUD and Indonesian Rupiah) in Indonesia
and Australia as well as on purchases made from suppliers in Indonesia and Australia.
The Group’s exposure to foreign currency risk and the effect on post tax profit as a result of changes in foreign currency
rates, with all other variables held constant, are as follows:
2021
Cash and bank balances
Accounts payable and others
Borrowings
Net exposure
Effect on post profit:
Increase by 10%
Decrease by 10%
2020
Cash and bank balances
Accounts payable and others
Borrowings
Net exposure
Effect on post tax profit:
Increase by 10%
Decrease by 10%
AUD
US$
11,200
670,516
92,625
774,341
77,434
(77,434)
753,121
1,045,744
78,448
1,877,313
187,731
(187,731)
SGD
US$
Indonesian
Rupiah
US$
USD
US$
Total
US$
2,259
1,976
4,235
423
(423)
8,067
22,035
-
49,207
4,881,084
110,815
5,041,106
504,111
(504,111)
6,917
4,384,207
-
30,102
4,391,124
106,877
10,385,235
3,653,110
169,543
15,938,811
3,856,550
14,145,222
19,964,904
-
-
581,968
(581,968)
11,612
10,040,270
2,000,000
12,051,882
779,717
15,492,256
2,078,448
18,350,421
3,010
(3,010)
439,112
(439,112)
-
-
629,853
(629,853)
Accounting Policy: Financial Instruments
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Recognition and Initial Measurement of financial assets
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified
and measured at amortised cost it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’
on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both.
Subsequent Measurement of financial assets
Financial assets at amortised cost (debt instruments) is the most relevant to the Group. The Group measures financial assets
at amortised cost if both of the following conditions are met:
•
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding
COKAL LIMITED Annual Report 2021 | Page 60
Notes to the Consolidated Financial Statements
for the year ended 30 June 2021
Note 24: Financial Risk Management (cont’d)
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s consolidated statement of financial position) when the rights to receive cash
flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Financial liabilities
A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial assets or
financial liabilities under unfavourable conditions.
Recognition and Initial Measurement of financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings or as payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables,
loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement of financial liabilities
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit or loss.
COKAL LIMITED Annual Report 2021 | Page 61
Notes to the Consolidated Financial
Statements for the year ended 30 June 2021
Note 25: Significant Events after the Reporting Date
Cokal Limited has concluded a binding commitment for a US$20m debt financing facility for development of the Bumi Barito
Mineral (BBM) Coking Coal Project with International Commodity Trade Ptd Ltd (“ICT”) on 14 July 2021 (refer to ASX
announcement on 14 July 2021).
The first drawdown for US$2 million of the debt facility from ICT has been received by Cokal Limited on 20 July 2021 (refer to
ASX announcement on 20 July 2021).
As at 18 August 2021, 12,500,000 ordinary shares in Cokal Limited were issued as a result of the exercise of options.
COKAL LIMITED Annual Report 2021 | Page 62
Declaration by Directors
The directors of the Group declare that:
1. The financial statements, comprising the statement of comprehensive income, statement of financial position, statement
of cash flows, statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001
and:
(a) comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
ended on that date.
2. The Group has included in the note 1 to the financial statements and explicit and unreserved statement of compliance
with International Financial Reporting Standards.
3.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
4. The remuneration disclosures included in pages 17 to 22 of the directors’ report (as part of audited Remuneration Report)
for the year ended 30 June 2021, comply with section 300A of the Corporations Act 2001.
5. The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is signed in accordance with a resolution of the directors.
Cokal Limited
Domenic Martino
Chairman
Sydney
29 September 2021
COKAL LIMITED Annual Report 2021 | Page 63
Shareholder Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 6 September 2021
(a) Distribution of Ordinary Shares
The number of holders, by size of holding, in each class of security is:
Ordinary shares
Number of holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
357
132
255
595
472
Number of
shares
252,540
392,959
2,278,334
24,315,949
909,842,531
Total
1,811
937,082,313
(b) Marketable Parcels
The number of shareholders holding less than a marketable parcel (a total of 2,702 ordinary shares) is 430 on a share price of
AU$0.185.
Unlisted options
(AU$0.045 @ 20/12/2021)
Unlisted options
(AU$0.016 @ 20/02/2023)
Unlisted options
(AU$0.05 @ 17/08/2023)
No. of
holder
No. of
options
No. of
holders
No. of
options
No. of
holders
No. of
options
-
-
-
-
1
1
-
-
-
-
1,000,000
1,000,000
-
-
-
-
4
4
-
-
-
-
75,000,000
75,000,000
-
-
-
-
1
1
-
-
-
-
2,500,000
2,500,000
Unlisted options
Unlisted options
Unlisted options
Unlisted options
(AU$0.045 @ 20/12/2021)
(AU$0.055 @ 20/12/2021)
(AU$0.07 @ 20/12/2021)
(AU$0.10 @ 20/12/2021)
No. of
holders
No. of
options
No. of
holders
No. of
options
No. of
holder
No. of
options
No. of
holders
No. of
options
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
5,000,000
5,000,000
1 – 1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
100,001 and
over
Total
1 – 1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
100,001 and
over
Total
COKAL LIMITED Annual Report 2021 | Page 69
(c) Substantial shareholders
Substantial shareholders as shown in substantial shareholder notices received by Cokal are:
Name of Shareholder:
Aahana Mineral Resources Sdn Bhd
Peter Anthony Lynch (estate) & Laura Anne Lynch
Ordinary Shares:
184,641,719
56,052,000
The Company notes that, as at 6 September 2021, the following shareholders hold substantial shareholdings (>= 5.0%) in Cokal:
Name of Shareholder:
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Ordinary
Shares:
229,395,770
49,628,295
% of total shares:
24.46%
5.30%
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
Options do not carry voting rights.
Twenty Largest Holders
The names of the twenty largest holders, in each class of quoted security (ordinary shares) are:
1 CITICORP NOMINEES PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 BNP PARIBAS NOMINEES PTY LTD
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